Rand recovers as Fed delivers few surprises

The rand firmed early on Thursday after the U.S. Federal Reserve delivered few surprises in announcing an interest rate hike.

At 0620 GMT, the rand traded at 13.24 per dollar, 0.4% stronger than its close on Wednesday.

Traders see support at 13.40 and again at 13.53 while resistance is expected at 13.15.

In fixed income, the yield for the benchmark government bond due in 2026 was down 5 basis points at 8.985%.

With little on the domestic agenda, traders will be watching the outcome of the European Central Bank’s policy meeting, at which it is expected to signal an end to a massive bond purchase scheme.

The rand ended a four-day losing streak on Wednesday, bouncing off a six-month low.

South African assets have been hurt recently by disappointing economic growth and an unfavourable external backdrop which has seen global investors pull back from emerging markets.

The Federal Reserve raised interest rates on Wednesday, as widely expected, and dropped a pledge to keep rates low enough to stimulate the economy “for some time”.