The rand was stronger early on Friday, reflecting optimism over signs of success in a COVID-19 treatment drug trial and early plans to reopen the US economy.

But the currency was on course for losses of roughly 4% versus the US dollar this week, hurt by a surprise rate cut and predictions that the global coronavirus pandemic will cause a deep economic contraction.

At 0645 GMT, the rand traded at R18.74 versus the dollar, around 0.6% firmer than its previous close.

The currency was supported by President Donald Trump’s plans to gradually reopen the US economy and reports based on partial data showing severe COVID-19 patients responded positively to a drug made by Gilead Sciences Inc, traders said.

Africa‘s most industrialised economy was in bad shape before it recorded its first case of the new coronavirus in March. Many analysts now expect a budget deficit of more than 10% of gross domestic product this fiscal year, which will exacerbate worries over the health of the country’s public finances.

Ratings agencies Moody’s and Fitch have already downgraded the country’s sovereign credit ratings since the country started a stay-at-home lockdown on March 27.

The lockdown has been extended until the end of April, with a cabinet minister saying on Thursday that industries will have to come back online slowly as restrictions are lifted.

Government bonds were a touch firmer in early deals, with the yield on the 2030 bond down 2 basis points at 10.440%.