South Africa's rand steady, stocks set to open higher

by Reuters 0

South Africa’s rand steadied against the dollar early on Thursday, with a wait-and-see mood ahead of the European Central Bank policy decision limiting movements in currencies.

At 0645 GMT, the rand traded at 15.2100 versus the dollar, unchanged from Wednesday’s New York close.

The ECB is expected to ease policy later in the day, emulating policymakers elsewhere seeking to bolster their struggling economies.

The focus was on how much the ECB, which had already cut rates into negative territory, would ease.

“We expect the rand to strengthen against majors, particularly against the euro as the ECB is expected to ease policy further,” Rand Merchant Bank analyst Isaah Mhlanga said.

“In all likelihood, local data will be outweighed by the ECB action because more policy easing will result in risk-taking for which the rand always partakes.”

Statistics South Africa is expected to release January mining and manufacturing data later in the day, expected to indicate how domestic economic activity started off this year.

Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0.59 percent.

In fixed income, the yield for the benchmark instrument due in 2026 was down 4 basis points to 9.22 percent.