S.Africa's rand close to 6-week highs as U.S. Fed hike in doubt - CNBC Africa

S.Africa's rand close to 6-week highs as U.S. Fed hike in doubt

Financial

by Reuters 0

S.Africa's rand close to 6-week highs as U.S. Fed hike in doubt. PHOTO: Reuters

South Africa's rand traded close to recent six-week highs against the dollar on Monday, supported by the possibility that the U.S. central bank might not raise interest rates this year.

The local stock market looked set to open flat at 0700 GMT as indicated by the Top-40 futures index which was up only 0.01 percent.

By 0654 GMT, the rand was at 13.0435 versus the greenback, up 0.32 percent from Friday's close at 13.0850.

The local unit was within striking distance of last Thursday's high of 13.0300, its strongest level since Aug. 27 according to Thomson Reuters data.

Some investors are now pricing in the likelihood that the U.S. Federal Reserve could defer interest rate hikes to next year.

This has boosted appetite for emerging market currencies like the rand, which have been sold heavily since the start of the year as investors bet on U.S. policy tightening commencing in 2015.

"Without any catalysts due today I would expect the rand to trade within a slightly narrower range than what we have become accustomed to over the past couple of weeks," Standard Bank trader Warrick Butler said.

"A range of 13.0300-13.1700 should hold for today but if we get a break through last week’s low (for dollar/rand) we could get a quick run to 12.95."

On the debt market, the yield for debt maturing in 2026 dipped 1 basis point to 8.135 percent.

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