Rand buoyed by retail sales data
South Africa’s rand was hovering just below a 17-day high against the dollar on Thursday morning.
|||Johannesburg - The rand hovered just below a 17-day high on Thursday, with a paring of bets that the Federal Reserve would raise rates later in the day giving the South African currency a tentative boost.
Better-than-expected retail sales figures had also helped buoy the rand on Wednesday, as it climbed to its highest level in September before consolidation overnight saw it weaken slightly.
By 06h30 GMT the rand had slipped 0.15 percent to 13.2860 per dollar after strengthening as far as 13.2660 in overnight trade, knocking on the door of resistance levels that could propel it into the 13.20 range.
“The close yesterday bodes well for further rand strength,” said Warrick Butler of Standard Bank. “If they [the Fed] surprise the market and hike then all this week's hard work will be undone in the blink of an eye,” Butler said.
The dollar was under pressure following a surprise 0.1 percent decline in US consumer prices in August, allowing the rand and its emerging market peers breathing space before the outcome of Federal Open Market Committee later tonight.
Yields on bonds edged up, with the paper due in 2026 adding 1.5 basis points to 8.475. The benchmark issue has added 150 basis points in the last month with the take-up of emerging market bonds subdued ahead of the US rate decision.
“If there is no change in US interest rates, and if post-meeting comments point to this only occurring in December, debt investors might put their money to work,” analysts NKC African Economics said in a note.
In the equities market, the blue-chip Top-40 stock index opened 0.62 percent higher.
The local index raced to a 4-1/2 week high in the previous session with SABMiller, which also listed on the Johannesburg exchange, surging after news that AB InBev was to make an offer to acquire the British firm.
REUTERS