South Africa's rand retreats from over 8-month high

11/10/2020 | 02:22am

JOHANNESBURG (Reuters) - South African rand retreated against the dollar on Tuesday, after touching its strongest level in more than eight months in the previous session, as markets cheered the developments around a coronavirus vaccine and Joe Biden's U.S. election victory.

At 0635 GMT, the rand traded at 15.4850 against the U.S. dollar, 0.6% weaker than its close on Monday.

The unit had climbed to 15.2100 per dollar on Monday, its strongest since March 5, as markets went into a frenzy on drugmaker Pfizer's announcement that its trial vaccine has been highly effective in preventing COVID-19.

"A move back to 15.50 will likely see further supply from exporters, but should we start to see sustained position covering from offshore entities, I can easily see a quickfire move back to 15.85/16.00 due to lack of liquidity and weak short positions," Warrick Butler, chief trader at Standard Bank, said in a note.

Government bonds also weakened in early trade, with the yield on the benchmark instrument due in 2030 adding 18.5 basis points to 8.915%.

(Reporting by Olivia Kumwenda-Mtambo; editing by Uttaresh.V)

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