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South African rand companies, markets concentrate on anticipated Fed rate cut

The South African rand firmed on Friday against a weaker dollar, as markets weighed up bets on the size of a rate cut expected in the world's most significant economy next week.

At 1539 GMT, the rand traded at 17.7275 against the dollar , about 0.2% firmer than its Thursday closing level.

The dollar last traded softer against a basket of peers, as financiers remained on tenterhooks ahead of next week's. Federal Reserve conference.

The spotlight is now on the Fed's policy update next week,. which will reveal just how worried policy makers are over the. U.S. economy's outlook, said Danny Greeff, co-head of Africa at. ETM Analytics.

While markets are particular the Fed will cut rates,. unpredictability around whether it will go with a 25-basis-point or. 50-basis-point cut remains.

I fear there is a risk of some short-term volatility (for. the rand) provided how aggressive the marketplace's positioning is for. rate cuts in the coming months, Greeff included, referring to rate. cuts in established economies.

Like other risk-sensitive currencies, the rand often takes. instructions from worldwide chauffeurs such as U.S. financial policy in. addition to regional information points.

Next week, regional investors will concentrate on August customer. inflation figures on Sept. 18 and the South African. Reserve Bank's (SARB) rates of interest announcement on. Sept. 19. Economic experts surveyed forecast the SARB will. reveal a 25 basis point rate cut.

On the Johannesburg Stock Market, the blue-chip Top-40. index closed about 0.4% up.

South Africa's benchmark 2030 government bond. also firmed, as the yield slipped 8.5 basis indicate 8.915%.

(source: Reuters)