S.Africa's rand softens as global risks loom

by Reuters 0

South Africa’s rand weakened early on Wednesday ahead of domestic consumer price inflation data and as investors waited for clues from a Federal Reserve meeting on when U.S. interest rates are likely to rise.

The wrangling over the Greek debt crisis also kept broader sentiment leaning towards safe haven assets as Prime Minister Alexis Tsipras accused Greece’s creditors on Tuesday of trying to “humiliate” Greeks with more cuts.

At 0642 GMT the rand was trading 0.35 per cent softer at 12.4100 to the dollar compared with its New York closing level on Tuesday.

“The rand has not yet reacted to the unfolding Greek tragedy but will certainly respond to tonight’s Fed statement. Risks are evenly spread, with large moves quite feasible,” John Cairnsof Rand Merchant Bank said in a note.

The Fed’s statement is due at 1800 GMT, followed half an hour later by Chair Janet Yellen’s news conference where investors will look for clues on the timing of lift off for interest rates.

On the domestic front, May CPI and April retail sales data were due to be released later in the session.

In fixed income, the yield for the 2026 benchmark was up 2 basis points to 8.43 per cent.