South Africa's rand slips; US Fed policy meeting in focus

JOHANNESBURG: South Africa's rand fell early on Wednesday, as investors awaited the outcome of the US Federal Reserve's monetary policy meeting for market cues.

At 0615 GMT, the rand traded at 15.0850 against the US dollar, 0.17% weaker than its previous close.

With no major local data releases, the rand was expected to take direction from global market-moving events.

Investors eyed Federal Reserve chair Jerome Powell's news conference later in the day after the US central bank concludes a two-day policy meeting.

Analysts expect the Fed to stick to its ultra-easy monetary policy.

"While we expect Mr Powell to present a more optimistic outlook, it will likely be tempered with caution regarding elevated short-term risks with an emphasis on very dovish forward guidance," analysts at NKC African Economics said in a note.

Lower US interest rates expectations boost investors' appetite for emerging market assets, which offer higher returns but carry more risk.

Traders are also keenly watching progress on the US fiscal stimulus as optimism over the plan has spurred risk-taking in recent weeks.

In fixed income, the yield on the long-dated benchmark bond due in 2030 was up by a single basis point to 8.785% in early deals.