adminJohannesburg. – The rand was flat at midday yesterday as uncertainty over the US Federal Reserve’s interest rate decision kept a lid on investor appetite for risk. At 12.16pm, the rand was at R10,5985 to the dollar from a close of R10,5982 on Tuesday. Against the euro‚ the rand was at R14,2050 from its previous close of R14,2140 and was at R17,9480 against the pound from R17,9608 previously.
The euro was at $1,3402, little changed from its overnight close.
Market participants widely expect the US central bank to taper its monthly bond purchases by another $10bn to $25bn at the Federal open market committee (FOMC) meeting.
But investors will be closely tuned into the Fed’s take on growth and inflation, as these may influence expectations of when the bank will make its first move on hiking rates.
“The rand is at the mercy of what the Fed does tonight,” Barclays Africa’s Ndzutha Mngqibisa said.
He said the release of better than expected US employment and growth figures yesterday was likely to incite rate hike fears in the US, which would be rand negative as investors moved capital from emerging economies to developed markets that were deemed less risky.
Figures due later are expected to show the world’s largest economy grew by 3 percent in the second quarter, following a contraction in the first quarter due to harsh weather conditions that limited economic activity. – Bdlive.
Online Reporter