Rand Steady as Gold Climbs Above $4,300, Investors Wait on the Fed
By Aboki Forex —
The South African rand held steady in early trade on Wednesday after recovering some of the losses it recorded in the previous two sessions. Support came from gold prices pushing back above the $4,300 per ounce level.
At 0820 GMT the rand traded at 16.26 against the dollar, little changed from its previous close. The firmer bullion price has lifted sentiment towards the rand, given how much the local economy depends on precious-metal exports.
Fed Decision Looms
Oil prices, which had been adding pressure to the rand, fell on Wednesday. An unexpectedly large increase in U.S. crude inventories brought a two-day rally to an end.
Currency strategist Andre Cilliers of TreasuryONE said the local unit was sitting at 16.23 rand to the dollar. "We could still see some short-term volatility ahead of the FOMC later today," he said.
Market participants are looking ahead to the U.S. Federal Reserve's policy decision, with a rate hike largely priced in.
Retail Sales Data Due
Domestic investors will turn their attention to July retail sales data, due at around 1100 GMT. Economists polled expect annual growth of 0.9%.
JSE and Bonds
On the Johannesburg Stock Exchange, the Top-40 index was down 0.6% in early trade.
South Africa's benchmark 2035 government bond was firmer in early deals. The yield fell 3.5 basis points to 8.775%.