Rand stable, but at weaker levels after hawkish Fed minutes
The rand was little changed against major global currencies on Thursday morning, but slightly stronger against the pound, as markets digested the hawkish US Federal Reserve minutes that were released on Wednesday.
The local currency had lost about 10c against the dollar after the Fed indicated it may raise interest rates a little more than expected in order to contain possible overheating of the US economy.
There is scope for further dollar strength, but it is too early to tell, said Standard Bank currency trader Warrick Butler. Flows were light, but another bout of risk aversion for global stocks could be in the offing in the days ahead, providing further momentum for the greenback.
The pound was under a little pressure on Thursday, as investors watched for developments in Brexit. Reports this week have suggested the EU may agree to a 12-month extension for a trade deal, amid signs that an amicable divorce settlement may not be reached within the next few months.
Local focus on Thursday is on mining production data for August, which is expected to give further indications of the health of SA’s economy in the third quarter.
Subsequent to this, focus will shift to next week’s medium-term budget policy statement, which will give firm indications of how the government plans to keep a lid on deficit spending, and rearrange the budget to provide a fillip for the economy.
At 9.30am the rand was at R14.2401 to the dollar from R14.2498, at R16.3767 to the euro from R16.3903, and at R18.6466 to the pound from R18.69.04. The euro was at an unchanged $1.15.
The benchmark R186 government bond was last seen at 9.15% from 9.13%.
Source: businesslive.co.za
