South Africa’s rand gained early on Thursday, before a central bank decision on interest rates, as tensions between China and the United States resurfaced and weakened the dollar.

At 0650 GMT the rand was 0.27% firmer at 16.4275 per dollar from an overnight close of 16.4850.

The rand has strengthened most of the week, spurred by the rescue package the European Union agreed and by investor hopes of a quick global economic recovery.

The currency has managed to break through the 16.50 technical resistance mark but has struggled to get beyond that, with a surge of COVID-19 cases locally and abroad keeping bullish investors cautious.

The South African Reserve Bank concludes its three-day policy meeting on Thursday, with most analysts expecting it to cut rates by 25 basis points but some forecasting no change.

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