The rand strengthened in early trade on Monday, as the dollar weakened ahead of key US inflation data this week that might give the Federal Reserve room to slow the pace of rate hikes at its Sept. 21 policy meeting.
At 0703 GMT, the rand traded at 17.17 against the dollar, 0.92% stronger than its previous close.
Economists at ETM Analytics said in a note that the dollar/rand has consolidated around the 17.30 mark overnight, with the market seemingly awaiting fresh directional impetus that may come from tomorrow’s US CPI data.
“Pulling back the lens slightly, there is still plenty of two-way risk in the market, as the USD’s extreme overvaluation is weighed against market risk and uncertainty surrounding the Fed’s policy outlook, Europe’s energy crisis, and China’s economic slowdown,” ETM Analytics said.
On the stock market, the Top-40 and the broader all-share rose almost 1% in early trade.
The government’s benchmark 2030 bond rose in early deals, with the yield down 7 basis points to 10.235%.