Rand firmer as traders await budget speech and Fed minutes
The rand was firmer against the dollar on Wednesday morning ahead of the budget speech to be delivered by Finance Minister Pravin Gordhan.
Gordhan is expected to deliver a contractionary budget where government spending will be cut while taxes are increased in an attempt to reduce SA’s budget deficit.
The National Treasury said earlier in the week that it expected the budget shortfall to be 3.1%‚ and this would decrease slightly over the next two years.
Sasfin Wealth analysts expected investors to remain cautious ahead of the speech.
Nedbank analysts said markets would remain transfixed on the much-discussed likely parliamentary debut of former Eskom boss Brian Molefe. The analysts expected the rand to trade between R13.00 and R13.30.
Internationally, the focus is on the next interest rate move in the US. The Federal Reserve will release minutes of its most recent policy meeting on Wednesday, which will give better insight into a possible rate increase in March.
Rand Merchant bank analyst John Cairns did not expect any "fireworks" after the Fed minutes were released. "Market attention will be on the tone the Fed took on the economy, the debate on a March hike and the debate on the balance sheet," said Cairns.
At 9.10am the rand was at R13.0927 to the dollar from Wednesday’s R13.1366. It was at R13.7753 to the euro from R13.8425 and R16.3502 to the pound from R16.3895.
The euro was $1.0523 from $1.0536.