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The South African rand strengthened to a 10-month high on Tuesday, a week before a general election, with analysts citing rising expectations that the outcome of the vote was unlikely to disrupt markets.
At 16:01 GMT yesterday, the rand traded at R18.0750 against the dollar , 0.62% stronger than its previous close.
It earlier firmed to R18.0300, a level not seen since August last year.
The dollar index was last trading around 0.05% stronger against a basket of global currencies.
A tracking poll by think-tank Social Research Foundation showed support for the governing African National Congress (ANC) has risen in the weeks leading up to the May 29 election, suggesting it may only need a small coalition partner or could even win a majority.
“There is little doubt that the global environment has played a role, but the market’s positive mood vis-a-vis the ZAR seems to be due mostly to the optimism around a market-friendly election outcome,” said HSBC in a research note.
Earlier on Tuesday, data from the central bank showed South Africa’s composite leading business cycle indicator fell 1.9% month-on-month in March.
The indicator collects data on business confidence, money supply and other factors and hints at the outlook for the economy.
On the stock market, the Top-40 index closed 0.4% lower.
South Africa’s benchmark 2030 government bond was stronger, with the yield down 3 basis points to 10.270%.
