Rand jumps more than 10c to dollar as euro rebounds on pressure for earlier hikes

Market focus has now shifted to the release of the minutes of the US Federal Reserve’s most recent meeting later in the day, which could indicate the extent of support within the federal open market committee (FOMC) for a more hawkish stance on interest rates.

“Should the minutes be hawkish, we can expect the dollar to gain ground, and the emerging-market currency recoveries could be stopped in their tracks,” said TreasuryOne currency dealer Andre Botha.

At 3pm the rand was at R13.5426 to the dollar from R13.6784, the euro at R15.8638 from R15.9454 and the pound at R17.9658 from R18.0967.

The euro was at $1.1713 from $1.1657.

Local bonds gained on the stronger rand with the R186 bid at 8.7% from 8.735% and the R207 at 7.405% from 7.425%.

The US 10-year bond was at 2.8516% from 2.8303%.

In Europe, even as central banks tighten the taps on monetary policy, hunger for German debt remains undiminished, Dow Jones Newswires reported.

Yields on US treasuries continue to rise, but those on German bonds are falling, dragging funding costs lower across Europe, the news service said.

Investors are buying bunds amid slowing eurozone growth, a flight to safety from geopolitical risks and as the ECB indicated that it will keep supporting the bond market even as it rolls back the easy-money policies of the past decade, investors said.

The German 10-year bund was last seen at 0.3096% from 0.3013%.