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JOHANNESBURG – South Africa’s rand steadied against the dollar in early trade on Wednesday, with investors focusing on the Sino-U.S. trade dispute and cues from the U.S. Federal Reserve on the path of future interest rate increases.
At 0630 GMT, the rand traded at 13.8900 per dollar, not far off its New York close of 13.9125 on Tuesday.
The currency opened flat at 13.9125.
“The local unit is slowly creeping above R13.90/$ as the market’s focus on the US-China trade war intensifies,” Bianca Botes, treasury manager at Peregrine Treasury Solutions, said in a note.
“While the rand has not been extremely volatile over the past few days, the risk-off environment is slowly nudging the rand to weaker levels,” said Botes.
U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, are scheduled to discuss contentious trade matters at the upcoming G20 summit in Buenos Aires between Nov. 30-Dec.1.
Market attention is also on a speech by Fed Chairman Jerome Powell later on Wednesday and the minutes from the Fed’s Nov. 7-8 meeting due on Thursday. Markets hope to gain fresh insights into the Fed’s thinking on the speed and number of rate hikes in the current cycle.
In fixed income, the yield on the benchmark government bond due in 2026 was up 3.5 basis points to 9.025 percent. – Reuters Africa
Bongani Ndlovu