Rand pares losses before Powell speech

The rand extended losses in early trade on Friday, ahead of a speech by the US Federal Reserve Chair, which could set the tone for future interest rate hikes in the world’s biggest economy.

At 0605 GMT, the rand traded at R18.87 against the dollar. The rand has had a turbulent week, contributing to its over 5% losses month-to-date.

The dollar last traded around 0.1% stronger against a basket of global currencies.

On Friday, Jerome Powell will give a speech at the Jackson Hole Symposium for global central bankers. The market is bracing for a hawkish tone from Powell, which could point to further US rate hikes.

The risk-sensitive rand often takes cues from global factors like US monetary policy in the absence of domestic economic data cues.

The South African government will hold its weekly auction of inflation-linked bonds later in the day.

South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 4.5 basis points at 10.245%.