JOHANNESBURG (Reuters) -The South African rand gained on Tuesday as risk appetite returned to global markets due to falling U.S. Treasury yields, as the first day of the BRICS summit of emerging economies kicked off in Johannesburg.
At 1605 GMT, the rand traded at 18.7900 against the dollar, about 0.9% stronger than its previous close.
“For the (rand) bulls to remain in charge of the market in the coming days, U.S. Treasury yields would need to continue falling, or at least not rise further,” said Danny Greeff at ETM Analytics.
South Africa is hosting the leaders of Brazil, India and China for the Tuesday-to-Thursday summit, while Russian President Vladimir Putin will join virtually.
Putin is not travelling to South Africa because of an international arrest warrant for alleged war crimes in Ukraine.
The BRICS summit “is unlikely to provide the market with significant or sustainable momentum until the bloc adopts implementable policies,” Greeff said.
Leaders will consider expanding membership of the BRICS grouping, as some members hope to position the bloc as a counterweight to the West.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed down 0.7%.
South Africa’s benchmark 2030 government bond was firmer, with the yield down 6 basis points at 10.475%.
(Reporting by Tannur Anders; Editing by Bhargav Acharya, Mark Potter and Jonathan Oatis)
