Rand firms in early trade

The rand firmed in early trade on Wednesday, with traders waiting for the minutes of the Federal Reserve’s July meeting for possible clues on further US interest rate cuts, as well as local consumer price inflation data.

At 0620 GMT, the rand traded 0.41% firmer at 15.30 per dollar.

“The rand is steady this morning as markets prepare for the Fed minutes … which will guide markets as to where the Fed sees interest rates and growth are headed,” Bianca Botes, a treasury partner at Peregrine Treasury Solutions, said in a note.

“While, technically, the rand is deemed oversold, the risks in the market are too prominent for the unit to regain any significant ground.”

The rand has lost nearly 7% since August 1, battered by local and global issues and breaking through a succession of technical milestones on its way to 15.50, a pivot-point last reached in September 2018.

South Africa’s statistics agency publishes July inflation figures at 0800 GMT, and, while limited price growth this year saw the central bank cut lending rates last month, a recent bout of currency volatility may reignite bets that the cutting cycle will be short lived.

In fixed income, the yield on the benchmark bond due in 2026 was down 1.5 basis points at 8.375%.