South African rand gains on dollar weakness, focus on Fed interest rate path

South African rand gains on dollar weakness, focus on Fed interest rate path
South African rand gains on dollar weakness, focus on Fed interest rate path

The South African rand gained in early trade on Wednesday against a weaker dollar as attention turns to the future path of interest rates in the world’s largest economy.

At 0725 GMT, the rand was trading at 18.0550 against the dollar, about 0.5% stronger than its previous close. The dollar was last trading about 0.06% weaker against a basket of global currencies.

“Fed Chairman Jerome Powell commented last night… that the Fed is not comfortable cutting rates at this time,” said Andre Cilliers, currency strategist at TreasuryONE.

But U.S. inflation has improved in recent months and Powell said “further good data would strengthen” the case for the central bank to cut interest rates.

Markets will focus on key US inflation data on Thursday, which could give more indications about the future path of Fed interest rates.

The rand often takes cues from global factors such as US monetary policy in the absence of significant local data.

On the Johannesburg Stock Exchange, the Top-40 index fell 0.1% in early trading.

South Africa’s benchmark 2030 government bond was marginally stronger in early trading, with the yield down 1.5 basis points to 9.79%.

-

-

PREV CH: Alexander Zetterberg’s consolation prize
NEXT Fatal pile-up in Laval: witnesses to the violent accident sought