South Africa's rand steadies, focus on local rates decision - CNBC Africa

South Africa's rand steadies, focus on local rates decision


by Reuters 0

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South Africa's rand was steady early on Thursday but looked vulnerable to a strengthening dollar and a local interest-rate decision due later in the day.

At 0650 GMT, the rand traded at 15.8500 versus the dollar, not far off its New York close on Wednesday of 15.8700.

Minutes of the Federal Reserve's April meeting released overnight "were very hawkish and expectations of a U.S. rate hike in June appears to be back on the table, which in turn has favoured the dollar," Nedbank Capital analysts Mohammed Nalla and Reezwana Sumad said in a note.

"Local focus will be on the South African Reserve Bank (SARB) monetary policy committee meeting later this afternoon. Ahead of the SARB meeting we expect liquidity to remain at a premium."

Economists said a slowdown in South African inflation reported on Wednesday bolstered the case for leaving rates unchanged.

Stocks were set to open lower at 0700 GMT, with the JSE securities exchange's Top-40 futures index down 0.47 percent.

The yield on the benchmark government bond due in 2026 was down 1 basis point at 9.465 percent.