Rand flat as US dollar strengthens on hawkish Fed
South Africa’s rand was flat on Thursday, as the dollar traded near a 16-month high after investors bet that the US Federal Reserve will tighten monetary policy faster than its peers.
At 0830 GMT, the rand traded at R15.89 against the dollar.
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Fed minutes showed on Wednesday that various policymakers at the US central bank would be open to speeding up the taper of their bond-buying programme and raising interest rates more quickly if high inflation held.
Dollar moves have been one of the main drivers for the rand in recent days, along with emerging market contagion linked to a meltdown in the Turkish lira.
Around 0930 GMT on Thursday, local investors will study domestic producer inflation data for more information about price pressures in Africa’s most industrialised economy.
Last week, the South African Reserve Bank raised rates for the first time in three years in response to broadening inflationary risks, but that has done little to buttress the rand, which is down roughly 4% against the dollar this month.
The government’s benchmark 2030 bond was flat early on Thursday, with the yield at 9.755%.
Source: moneyweb.co.za
