JOHANNESBURG: The South African rand recovered in early trade on Tuesday against the dollar as global markets braced for consumer inflation data out of the US that could set the tone for the Federal Reserve’s future interest rate path.
At 0635 GMT, the rand traded at 19.0025 against the dollar , about 0.4% stronger than its previous close.
The dollar last traded around 0.18% weaker against a basket of global currencies. The rand has made a slight recovery after being on the backfoot against the dollar on Monday on expectations the Fed might not cut interest rates early next year.
“With hopes of an early rate cut by the Fed receding, traders will be watching today’s inflation data and Powell’s post-FOMC press statement very closely tomorrow,” said Andre Cilliers, currency strategist at TreasuryONE. The US Federal Reserve is expected to hold rates on Wednesday.
South African rand weaker ahead of data-filled week
The risk-sensitive rand often takes cues from global movers like US monetary policy in addition to local drivers.
Locally, Statistics South Africa will publish the country’s October mining data and manufacturing figures.
South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 3.5 basis points to 10.100%.
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