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South African rand dips as dollar lifted by Fed minutes

PUBLISHED: Thu, 20 Aug 2020 12:34:16 GMT

JOHANNESBURG (Reuters) – The South African rand dipped early on Thursday, as the U.S. dollar was lifted by Federal Reserve minutes that were not as dovish as some traders had expected.

At 0600 GMT, the rand traded at 17.2975 versus the dollar, roughly 0.2% weaker.

South African government bonds were flat, with the yield on the 2030 instrument at 9.33%.

In the absence of major domestic data releases this week, the rand has mainly taken its cue from global factors.

The readout of last month’s Fed meeting gave few clues about whether a more dovish shift in policy is possible in the coming months, helping to ease recent selling pressure on the dollar.

South African state power utility Eskom was due to implement a third straight day of planned power cuts on Thursday after breakdowns at its coal-fired power stations.

Local financial markets have shrugged off the latest bout of power cuts so far, but they highlight the obstacles to growth in Africa’s most industrialised economy.

Official forecasts are for a contraction of at least 7% this year, as a strict lockdown from late March piled pressure on local businesses and the coronavirus pandemic dented global demand for South African exports.


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