The rand was a lot stronger on Friday morning, recovering from its worst levels against the dollar in more than two months, as the markets remained volatile. The local currency bought a single dollar for about R14.22, rebounding from lows of R14.70, which was its worst level in more than two months. Local government bonds fared even better, with the yield on the benchmark R186 dipping to its lowest level since early August. The rand and local bonds benefited from a much weaker dollar, which in turn came under pressure from gradually declining US government bond yields. The yield on the benchmark US 10-year paper was at 2.5781%, its lowest level in a year, according to Iress data, suggesting that market participants think the US Federal Reserve will either pause or slowdown the pace of its rate hiking cycle. The developments could revive the so-called carry trade, where money is borrowed in low interest rate environments and subsequently invested in currencies that offer higher retur...
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