Monday, 24th February 2020

South Africa’s rand firmed early on Tuesday, shaking off the risk aversion sparked by geopolitical tensions as Turkey said it was preparing a military operation in northeast Syria.

At 0650 GMT the rand was 0.51% firmer at 15.1100 per dollar versus a close of 15.1900 overnight in New York. 

Turkey said on Tuesday it had completed preparations for a military operation in northeast Syria after the United States began pulling back troops, opening the way for a Turkish attack on Kurdish-led forces long allied to Washington.

But U.S. President Donald Trump warned he would “obliterate” the NATO ally’s economy if it took action in Syria that he considered “off limits” following his decision on Sunday to pull 50 American special forces troops from the border region.

Some rand-buying was spurred by mainly technical factors after the currency failed to close above the 15.20 resistance mark on Monday, traders said, prompting some investors to re-enter long positions with the sub-15/$ levels on the horizon.

“The rand does feel like it has perhaps a little more room to correct or consolidate, and perhaps squeeze some stale long positions out on a move through 15.00 and possibly toward 14.90-95 support band,” senior currency trader at Standard Bank Oliver Alwar said.

Bonds were steady with the yield on the benchmark government issue due in 2026 at 8.215%.


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