adminJohannesburg — The rand retreated from its firmest in two weeks on Wednesday after gaining on a narrower current account deficit, as uncertainty over a US interest rate decision weighed.
Yields on government bonds were flat in early trade, with the benchmark paper maturing in 2026 unmoved at 8.5 percent.
On the bourse the Top 40 index ticked up 0.9 pwercent, pointing to the local bourse opening 395 points higher.
At 08:30 the rand edged 0.1 percenet weaker to R13.4800/$, having gained as far as 13.4100 overnight to its firmest since September 3, after the South African Reserve Bank (Sarb) data showed the country recorded a trade surplus in the second quarter, helping narrow the current account shortfall.
Gains however were capped by varying bets on whether the US Federal Reserve would lift interest for the first time in six years when its two-day policy meeting concludes on Thursday.
Some investors are betting that recent volatility in global markets and increasing evidence of slowing growth in China will prompt the Fed to hold fire this month.
“All things being equal the rand may have fared better but unfortunately the timing, with the imminent US rate decision, was not great,” said Warrick Butler, a trader with Standard Bank.
Failing to hold on to gains beyond the 13.4200 technical resistance risked pushing the rand back towards levels between 13.80 and 14.00, Butler said.
The dollar traded on the backfoot overnight but is poised to advance after upbeat consumer spending data kept alive expectations that the Fed would raise interest rates.
Statistics South Africa publishes retail sales figures for July at 13:00, the last set of significant data before an inflation release and the Sarb’s decision on rates next week. — Reuters.
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