JOHANNESBURG: The South African rand gained in early trade on Wednesday against a weaker dollar, as focus remains on the future interest rate path of the world’s biggest economy.
At 0725 GMT, the rand traded at 18.0550 against the dollar , around 0.5% stronger than its previous close.
The dollar last traded around 0.06% weaker against a basket of global currencies.
“Fed Chair Jerome Powell commented last night… that the Fed is not comfortable cutting rates right now,” said Andre Cilliers, currency strategist at TreasuryONE.
But US inflation has been improving in recent months and Powell said that “more good data would strengthen” the case for central bank interest rate cuts.
Markets will focus on key US inflation data on Thursday that could give more hints on the Fed’s future interest rate path.
The rand often takes cues from global drivers like US monetary policy in the absence of major local data points.
South African rand stable as markets await US interest rate hints
On the Johannesburg Stock Exchange, the blue-chip Top-40 index traded around 0.1% weaker in early trade.
South Africa’s benchmark 2030 government bond was slightly stronger in early deals, as the yield weakened 1.5 basis points to 9.79%.
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