JOHANNESBURG: South Africa's rand firmed for a third straight session against the dollar on Wednesday as investors bet that the US Federal Reserve might issue a dovish policy statement, boosting the appeal of high-yielding emerging market assets.
With investors focused on the Fed, the rand barely moved after a Statistics South Africa survey showed that unemployment eased slightly to 25 percent in the second quarter from 26.4 percent previously.
At 1545 GMT the rand was trading at 12.5000 to the dollar, a 0.49 percent gain over Tuesday's New York close. Traders said caution had prevailed for much of the session ahead of Fed chair Janet Yellen releasing the Federal Open Market Committee policy statement at 1800 GMT.
"There is talk that she might be a little more dovish than expected so that's helped the currencies a little bit; Turkey is a bit stronger, the rand is a bit stronger, the Aussie is a bit stronger," said Ion de Vleeschauwer, chief dealer at Bidvest Bank. "If (Yellen is) confident about the US economy, then the rand is going to weaken pretty quickly. If she's more dovish then there could be more rand strength tomorrow."
Government debt was also bid slightly firmer on the day, pulling the yield for paper maturing in 2026 a basis point lower to 8.18 percent.
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