Rand retreats from two-week high

The rand retreated from a two-week high in early trade on Wednesday, while domestic consumer price inflation data and the US Federal Reserve’s closely-watched policy decision are due.

At 0630 GMT, the rand traded at 14.55 per dollar, 0.3% weaker than its New York close on Tuesday.

The currency lifted to a two-week high of 14.49 on Tuesday on the back of a combination of factors, including government signalling it will give additional support to power firm Eskom and as emerging currencies were boosted by expectations the Federal Reserve could signal US rate cuts.

Read: Ramaphosa to announce more support for Eskom

President Cyril Ramaphosa is scheduled to make his state of the nation (Sona) address on Thursday, which is likely to include more measures to support cash-strapped Eskom.

“All eyes will be on the local CPI data today, followed by the Federal Reserve interest rate announcement later today,” said Bianca Botes, a Treasury partner at Peregrine Treasury Solutions.

“The good news should be priced in for the most part, but short-term knee-jerk reactions can be expected leading up to and during the events of the Federal Reserve and Sona over the next two days, posing good foreign currency buying opportunities.”