Rand firmer ahead of Fed decision on interest rates
The US Federal Reserve is scheduled to make its decision on interest rates on Wednesday
The rand was firmer against the dollar on Tuesday morning as global markets await the US Federal Reserve’s decision on interest rates.
The US Fed is scheduled to make its decision on Wednesday, with speculation that it will keep rates unchanged despite mounting pressure from US President Donald Trump for rate cuts.
“President Trump has been imploring the Fed to cut rates, and it seems that the economics are starting to show the need for an interest rate cut by the Fed,” TreasuryOne senior currency dealer Andre Botha said.
“Markets have priced in two interest rate cuts this year. There could be a knee-jerk reaction to any movement by the Fed and we could see the rand trading a bit stronger following and rate cut,” Botha said.
By 9.35am, the rand had strengthened 0.14% to R14.7869/$, while the local currency was little changed at R16.6208/€ and R18.5451/£. The euro was up 0.2% to $1,124.
The benchmark R186 government bond was weaker, with its yield rising one basis points to 8.365%. Bond yields move inversely to bond prices.
Gold was 0.4% higher at $1,345/oz and platinum 0.57% to $798.44. Brent crude had fallen 0.61% to $60.6 a barrel.
Statistics SA is expected to release tourist accommodation, land transport and food and beverages figures for April. The EU is set to release inflation figures for May and balance of trade for April.