South African rand firms against US dollar ahead of country’s credit review

PUBLISHED: Fri, 12 Oct 2018 12:22:54 GMT

JOHANNESBURG (Reuters) – The South African rand firmed against the globally hobbled dollar early on Friday ahead of the country’s credit review announcement by ratings agency Moody’s later in the day.

The rand was 0.85 percent stronger at 14.5100 per dollar at 0650 GMT, having closed in New York at 14.6350.

The rand is expected to trade between 14.3500 and 14.7000 to the dollar on Friday, NKC African Economics wrote in a note.

Moody’s is the last of the top rating agencies to have Pretoria’s long-term foreign-currency debt in investment grade.

South Africa’s stable outlook on its credit rating means there is little chance of a downgrade, Moody’s said on Sept. 13, but a commitment to fiscal consolidation at the October budget would be key to maintaining the positive rating.

The rand was supported by the slightly-better-than-expected South African manufacturing production data for August.

Globally, the U.S. dollar traded at its lowest level this month against its major peers on Friday as declining U.S. treasury yields and further losses on Wall Street soured sentiment. [FRX/]

In fixed income, the yield on the benchmark government bond due in 2026 fell 1 basis points to 9.255 percent.

Stocks are due open firmer at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 1.10 percent.

Reporting by Nomvelo Chalumbira; Editing by Ed Stoddard

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