South African rand extends gains after Fed rate hold

Login

Register

http://www.clubofmozambique.com/

South African rand extends gains after Fed rate hold

4:56 CAT | 02 Nov 2023

File photo: Reuters

The South African rand firmed in early trade on Thursday against a weaker U.S. dollar after the Federal Reserve kept interest rates unchanged.

At 0600 GMT, the rand traded at 18.4900 against the dollar ZAR=D3, about 0.15% stronger than its previous close.

The dollar =USD was last down about 0.09% against a basket of global currencies.

The rand had strengthened on Wednesday after South Africa’s mid-term budget statement, despite the proposal for tax measures next year to raise additional revenue as budget deficits are projected to widen over the next three years.

Later on Wednesday, the Fed announced its decision to keep interest rates unchanged in the world’s biggest economy, weakening the dollar as investors perceived that the U.S. central bank may be done raising rates.

“USD/ZAR’s momentum is still solidly to the downside, but it has probably run too far too fast and needs some consolidation,” Rand Merchant Bank analysts said in a morning briefing.

The risk-sensitive rand often takes cues from global factors like U.S. monetary policy in addition to local drivers.

South Africa’s benchmark 2030 government bond ZAR2030= was flat in early deals at 10.505%.

Source: Reuters