Rand flat as dollar rises after hawkish Fed minutes

The rand was flat early on Thursday, struggling to make significant gains against a stronger dollar after meeting minutes showed the US Federal Reserve preparing to move aggressively to head off inflation.

At 0615 GMT, the rand traded at around R14.67 against the dollar, largely flat compared with its previous close.

Many Fed officials said they were prepared to raise interest rates in half-percentage-point increments in coming policy meetings to tame inflation, according to the minutes released on Wednesday.

Hawkish Fed comments tend to weigh on the rand because higher rates in developed markets drain capital from higher-yielding but riskier emerging markets such as South Africa.

“The foreign exchange markets remain in an extended range, with trading activity at a minimum as the markets await the next potential catalyst,” analysts at Nedbank said in a note.

In fixed income, the yield on the benchmark 2030 government bond was down a single basis point to 9.585% in early deals.