South Africa's rand steady, stocks edge up in early trade - CNBC Africa

South Africa's rand steady, stocks edge up in early trade

Southern Africa

by Reuters 0

South Africa's rand steady, stocks edge up in early trade. Photo: Pixabay.

South Africa's rand steadied against the dollar early on Thursday supported by investor appetite for riskier assets that was nonethless tempered by the possibility that the U.S. Federal Reserve may raise interest rates.

At 0647 GMT, the rand traded at 15.6645 per dollar, not far off its New York close of 15.6725 on Wednesday.

Analysts said this week that risk appetite in emerging markets was buoyed by a debt relief deal being reached for Greece and a new, more business friendly seeming cabinet in Turkey.

"Risk appetite remains strong while dollar gains, which were holding back the rand, have faded," Rand Merchant Bank currency analyst John Cairns said in a note.

"The big market story remains the Fed. Yellen's speech tomorrow is the next big event, although U.S. data offers some risk in-between."

Federal Reserve Chair Janet Yellen is due to speak on Friday, and could reinforce expectations that the central bank might raise interest rates as early as next month, or July. Hawkish minutes from the Fed's April policy meeting and comments by several policymakers hinted that a hike could be forthcoming.

The prospects of higher U.S. interest rates undermine the attraction of riskier but high-yielding emerging markets assets.

Locally, focus was on April's producer inflation data due out at 0930 GMT.

On the stock market, the Top-40 index was up 0.65 percent, while the broader all-share rose 0.64 percent in early trade.

In fixed income, the yield for the benchmark instrument due in 2026 was flat at 9.43 percent.

 

(Reporting by Olivia Kumwenda-Mtambo; Editing by Raissa Kasolowsky)

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