South African rand pauses after overnight gains on Powell comments

JOHANNESBURG: South Africa's rand was flat early on Wednesday, pausing after overnight gains on comments by Federal Reserve Chair Jerome Powell, which allayed market fears of a sudden withdrawal of US monetary support that had weighed on riskier assets.

At 0707 GMT, the rand traded at 15.5150 against the dollar, not far from its previous close of 15.5100.

In testimony at his re-nomination hearing on Tuesday, Powell said policymakers were still debating approaches to reducing the Fed's balance sheet, and that it could sometimes take two, three or four meetings for them to make such decisions.

South Africa's rand falls as hawkish Fed lifts dollar

Those comments - which were less hawkish than expected - buoyed appetite for risk and supported currencies, such as the rand, which are highly sensitive to shifts in sentiment on global markets.

The rand has tended to track global drivers in recent sessions.

The South African government's benchmark 2030 bond was slightly firmer in early deals, with the yield falling 3.5 basis points to 9.495%. The Top 40 index on the Johannesburg Stock Exchange was 1.1% higher in early trade, boosted by Powell's remarks which came after the market close on Tuesday.