South Africa’s rand steadies against stronger dollar

PUBLISHED: Mon, 04 Apr 2022 13:09:19 GMT
Olivia Kumwenda-Mtambo

JOHANNESBURG, April 4 (Reuters) – South Africa’s rand steadied in early trade on Monday, struggling for momentum as a stronger dollar overshadowed Moody’s revision of the country’s outlook to “stable” from “negative”.

At 0635 GMT, the rand traded at around 14.6500 against the dollar, largely unchanged from Friday’s close.

The dollar made a firm start to the week, as the monthly U.S. jobs report indicated a strong labour market and is likely to keep the Federal Reserve on track to maintain its hawkish policy stance.

Higher rates in developed markets tend to drain capital from higher-yielding but riskier emerging markets such as South Africa.

Read more: Markets will be looking for clues from the Fed ahead, as historically strong month gets underway

On Friday, ratings agency Moody’s revised South Africa’s outlook to “stable”, saying the country’s improved fiscal outlook would help the government stabilise its debt burden over the medium term.

Investor focus was also on talk of more sanctions against Russia over its invasion of Ukraine.

“As we head into the new week, Russia is, yet again, in the headlines, as bans on Russian gas imports to Europe come under discussion by European leadership,” said Bianca Botes, director at Citadel Global.

While Russia-Ukraine peace talks dragged on, reports of Russian atrocities led Germany to say the West would agree to impose more sanctions in coming days.

(Reporting by Olivia Kumwenda-Mtambo; Editing by Kirsten Donovan)

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