Picture: REUTERS
Picture: REUTERS

The rand was firmer against major currencies on Monday morning ahead of this week's interest rate decision.

The Reserve Bank monetary policy committee is expected to announce its decision on the interest rate on Thursday. The Bank kept the rate unchanged at 6.75% in May. A 25 basis point cut is the consensus among analysts, according to a Bloomberg poll, as major central banks take on a dovish tone. 

Mercato Financial Services analyst Nico du Plessis said in a note that if the Bank does decide to cut rates, the rand could face a “tougher” week than it did last week. 

The rand broke through R14 against the dollar last week after US Federal Reserve chair Jerome Powell hinted that the Fed may cut interest rates at its next meeting in two weeks’ time. 

China’s second-quarter GDP rose 6.2% compared with 6.4% in the same period in 2018, its slowest growth in 27 years, further fuelling global growth concerns.

At 9.50am, the rand had firmed 0.69% to R13.8828/$, 0.58% to R15.6632/€ and 0.78% to R17.4417/£. The euro had strengthened 0.11% to $1,1282. 

The benchmark government 10-year bond was stronger, with its yield falling 2.5 basis points to 8.055%. Bonds yields move inversely to bond prices.

Gold was little changed at $1,414.30/oz while platinum gained 1.04% to $837.21. Brent crude had fallen 0.24% to $66.70 a barrel. 

No major economic data is expected on Monday. Stats SA will release retail sales for May on Wednesday.