South African assets firm on Fed chief’s ‘patient’ comments

The rand and local stocks gained early on Friday, as investors grew increasingly confident that the US Federal Reserve may hit the pause button on monetary tightening this year.

At 0740 GMT the rand was up 0.1% at R13.84 after an overnight close of R13.85.

The Johannesburg Stock Exchange’s all-share index rose 0.7% to 53,644 points, while the benchmark 2026 government bond firmed. The dollar index fell.

Fed Chairman Jerome Powell reiterated on Thursday that the US central bank had the ability to be patient on monetary policy given that inflation remains stable.

Markets are now pricing in no further rate hikes by the Fed this year, an outcome which would be supportive for emerging market currencies like the rand.

Dampening investor sentiment, however, a South African business confidence index fell last month, while manufacturing growth slowed to 1.6% in November, data showed on Thursday

The rand is expected to trade in a range of R13.70 to R13.90 to the greenback, NKC African Economics said in a note.