South Africa’s rand steadied against the dollar in early trade on Wednesday after a sell-off on Tuesday following attacks in Brussels, but traders said a strong greenback would keep the local currency under pressure.
At 0700 GMT, the rand traded at 15.2540 per dollar, not far off its New York close of 15.2345 on Tuesday.
The currency shed as much as 1 percent against the dollar on Tuesday with riskier emerging markets on the backfoot as investors sought safe haven assets in the wake of terror attacks in Brussels.
“The Brussels attacks caused some knee-jerk risk-aversion yesterday but the influence has already dissipated, leaving global markets to trade flat without much direction,” Rand Merchant Bank currency analyst John Cairns said in a note.
“Expect ongoing quiet range-bound rand trade, with only dollar movements generating any risk.”
The dollar was underpinned by hawkish comments from U.S. Federal Reserve officials suggesting interest rate increase could be on the way sooner rather than later.
Locally, the focus was on consumer inflation data due to be released at 0800 GMT.
On the stock market, the Top-40 index was down 0.52 percent while the broader all-share fell 0.53 percent in early trade.
In fixed income, the yield for the benchmark instrument due in 2026 was unchanged at 9.305 percent.