JOHANNESBURG: South Africa’s rand firmed on Tuesday, helped by a fragile dollar as markets counted down to a crucial US Federal Reserve meeting amid speculation it will soon hit the pause button to its monetary tightening cycle.
Stocks fell, dragged by losses in one of the country’s largest banks, Nedbank, after reports of a regulatory investigation into its West African associate Ecobank.
At 1511 GMT, the rand traded at 14.2925 per dollar, 0.7 percent stronger than its previous close. The currency hit an intraday best of 14.2450 earlier in the session.
The dollar index was down 0.16 percent, as some investors speculated growth worries could prompt the US Fed to slow the pace of interest rate hikes after this week’s meeting.
“Over the most recent sessions, the dollar has shed some value as the markets await the outcome of the FOMC meeting tomorrow,” Nedbank analysts said in a note.
“Although a hike is largely priced in, the markets will likely be seeking guidance as to the future trajectory.”
Government bonds also gained, with the yield on the benchmark instrument due in 2026 down 9 basis points to 9.115 percent.
On the bourse, the Top-40 index fell 0.68 percent to 45,217 while the broader all-share edged 0.64 percent lower to 51,231.
Nedbank shares ended 2.18 percent lower, trimming losses after sliding more than 4 percent earlier after a South African newspaper report that Nigeria’s accountancy regulator had begun a probe into its West African associate Ecobank.
Nedbank, which is one of South Africa’s four largest lenders, holds a 21 percent stake in the Togo-based lender.
Among gainers, Gold Fields rose 1.89 percent to 47 rand after the gold miner said a strike at its sole domestic mine had ended.