South African rand steady ahead of credit rating review

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South African rand steady ahead of credit rating review

10:32 CAT | 17 Nov 2023

File photo: Reuters

The South African rand was little changed in early trade on Friday, ahead of S&P’s sovereign credit rating review and talks by four U.S. Federal Reserve speakers that could move markets.

At 0625 GMT, the rand traded at 18.3850 against the dollar ZAR=D3, not far from its previous close of 18.3725.

The dollar =USD was also flat against a basket of global currencies.

S&P Global Ratings is scheduled to review South Africa’s sovereign credit rating on Friday.

In March, S&P downgraded its outlook to stable from positive, citing infrastructure constraints and a severe power crisis. In May it had held off from changing the country’s sovereign credit rating or outlook.

“USD/ZAR seems to want to naturally trend higher but … it’s run ahead of other markets and may need a breather. Event risk is moderately high given a lot of Fed talk late this afternoon,” said Rand Merchant Bank analysts in a morning briefing.

Talks by four Fed speakers on Friday may give hints on the future interest rate path of the world’s biggest economy.

Like other risk-sensitive currencies, the rand often take cues from global factors such as U.S. monetary policy.

South Africa’s benchmark 2030 government bond ZAR2030= was slightly stronger in early deals, with the yield down 1 basis point to 10.040%.

Source: Reuters