JOHANNESBURG: South Africa's rand was largely unchanged against the dollar in early Wednesday trade but analysts said the short-term prognosis was for the currency to weaken as US interest rates look set to rise.
The JSE securities exchange's Top-40 futures index was up 0.6 percent, indicating the actual index would open 265 points higher.
At 0648 GMT the rand traded at 14.0250 versus the dollar, barely moved from Tuesday's New York close at 14.0370.
The rand was aided by broad-based dollar losses as investors cut crowded long positions in the lead-up to the US Thanksgiving holidays.
"The rand will continue to be vulnerable for further depreciation as we approach the start of US monetary policy normalisation - widely expected to happen in mid-December," NKC African Economics said in a note.
"Higher local interest rates will not remedy this situation as the rand remains at the mercy of broader emerging market sentiment."
The rand has given up most of last week's gains after pushing to 2-1/2 week highs following a surprise 25 basis point hike in rates by the South African Reserve Bank.
Government bonds edged higher on Wednesday, and the yield for benchmark debt due in 2026 dipped 2 basis points to 8.43 percent.
Comments
Comments are closed for this article.