South African rand stable after week of gains

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South African rand stable after week of gains

9:57 CAT | 06 Nov 2023

File photo: Reuters

The South African rand was little changed in early trade on Monday against a weaker dollar as recent U.S. economic data fuelled expectations that the Federal Reserve is done hiking interest rates.

At 0530 GMT, the rand traded at 18.2525 against the dollar ZAR=D3, near the Friday close of 18.2575. The rand has jumped more than 2% against the greenback since the start of November.

The dollar =USD last traded around 0.06% weaker against a basket of global currencies.

“More evidence that the U.S. will experience a soft landing has created a perfect environment for the rand, with the USD weaker,” said Rand Merchant Bank analysts in a morning briefing.

On Friday, the rand jumped as U.S. Treasury yields fell and data out of the U.S. showed fewer than expected jobs had been created in October, boosting hopes the Fed is done raising interest rates.

Interest rate cuts in the world’s biggest economy could come as soon as May, RMB analysts added.

Like other risk-sensitive currencies, the rand often takes cues from global drivers like U.S. monetary policy in the absence of local drivers.

South Africa’s benchmark 2030 government bond ZAR2030= was flat in early deals at 10.310%.

Source: Reuters