Rand falls back after surge on US Fed comments

The rand fell back in early trade on Thursday, after surging a day earlier when the US Federal Reserve signalled it had turned a corner in the fight against inflation.

Investors took a dovish cue from Fed Chair Jerome Powell’s remarks on Wednesday that “the disinflationary process has started” in the world’s largest economy, prompting the dollar to tumble and boosting emerging market currencies worldwide.

At 09:13 the rand was at R17.04 against the dollar.

ETM Analytics said in a research note that for now South African news was a distraction given the large sell-off in the dollar.

No major domestic data releases are due on Thursday, so the rand is likely to continue to take its cue from global drivers.

The rand is among the worst-performing emerging market currencies this year, weighed down by a power crisis that has seen outages on every day in 2023.

The government’s benchmark 2030 bond was firmer in early deals on Thursday, the yield down 7.5 basis points to 9.53%.