JOHANNESBURG (Reuters) – South Africa’s rand firmed early on Tuesday, with demand for riskier emerging market currencies boosted after European Union (EU) countries agreed a rescue package for their coronavirus-hit economies.

At 0720 GMT the rand was 0.63% firmer at 16.5175 per dollar compared to a close of 16.6225 overnight.

“The EU stimulus package is reported to be worth 750 billion euros, which would have a significant impact on economic activity in Europe,” said economists at ETM Analytics.

“That will ultimately spill over into the emerging market space too, if not directly, then through improved sentiment and demand for EM exports.”

The EU was slow to coordinate its initial response to the COVID-19 pandemic but the rescue fund is likely to shore up sentiment as investors worry about the surge of infections.

Bonds were also firmer, with the yield on the benchmark 2030 government issue down 5.5 basis points to 9.405%.