JOHANNESBURG: South Africa’s rand strengthened in early trade on Tuesday, bolstered by improved global market sentiment after a dramatic U-turn in British fiscal policy.

At 0655 GMT, the rand traded at 18.0050 against the US dollar, 0.4% firmer than its previous close.

On Monday, Britain’s new finance minister Jeremy Hunt scrapped Prime Minister Liz Truss’s economic plan and scaled back her vast energy subsidy, boosting appetite for risk.

The volatile rand tends to rally at times of global investor optimism, when the relatively high yields it offers make it an attractive carry trade.

Curbing further gains in the rand, South African state utility Eskom ramped up scheduled power cuts after generators at five of its plants broke down overnight.

South African rand firms against dollar in early trade

The government’s benchmark 2030 bond was little changed in early deals, with the yield up 0.5 basis points to 10.785%.