Picture: REUTERS
Picture: REUTERS

The rand was subdued on Wednesday morning as investors awaited the medium-term budget policy statement (MTBPS), as well as the US Federal Reserve's interest rate decision later in the day.

The markets are waiting to hear the size of the government's budget deficit as well as further clarity regarding the funding of Eskom, as finance minister is set to deliver the MTBPS on Wednesday afternoon.

“We do not expect too many positives from this as he has a very tough job in trying to balance the dire books of the country. How much extra debt do we need to take on to ‘save’ failing state entities? Where will jobs and growth come from?” TreasuryOne senior currency dealer Andre Botha said.

The US Fed's monetary policy decision is likely to drive global markets on Wednesday with expectations that the Fed will cut the interest rate by 25 basis points at its second-last meeting for 2019.

“Any surprise here could really shake things up in the markets and ask serious questions of the central bank's communication strategy,” Oanda senior market analyst Craig Erlam said.

“Having already cut interest rates twice, policymakers will likely once again abide by market demands, at which point they could declare an end to this mid-cycle adjustment, or at least warn of no more in the near-future,” Erlam said.

At 10.44am, the rand was flat at R14.6268 while it had strengthened 0.1% to R16.2639/€ and it was little changed R18.8351/£. The euro was flat at $1.112. 

Gold added 0.17% to $1,490.21/oz and 0.23% to $922.59/oz. Brent crude was flat at $61.6 a barrel.