The rand near lowest since 2020 as markets brace for Fed

The rand dipped early on Tuesday, trading near its weakest against the dollar since 2020, as financial markets braced for this week’s US Federal Reserve meeting where an aggressive interest rate hike is expected.

At 0555 GMT, the rand traded at R17.69 against the dollar, around 0.1% weaker than its previous close.

The actions of the US central bank are driving market sentiment globally ahead of its latest policy announcement on Wednesday.

The South African Reserve Bank (Sarb) is also expected to raise rates in a decision announced on Thursday, but for now all eyes are on the Fed.

Around 0700 GMT on Tuesday the SARB will release a leading business cycle indicator that gauges the outlook for Africa’s most industrialised economy.

Struggling utility Eskom is implementing lengthy rotational power cuts which have dampened this year’s growth prospects, fuelled public frustration and prompted President Cyril Ramaphosa to cut short an overseas trip to travel back to South Africa.