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The South African rand gained in early trade yesterday, as markets geared up for a week packed with interest rate announcements and a local inflation print.
At 0720 GMT, the rand traded at 17,66 against the dollar, about 0,6 percent firmer than its previous close.
“There are many moving parts to consider this morning that will have an important role to play in determining SA’s economic future over the next few months,” said ETM Analytics in a research note.
Tomorrow, local investors will look to South Africa’s August consumer inflation figures.
Consumer inflation fell to 4,6 percent year-on-year in July, only just above the level the South African central bank aims for, 4,5 percent.
Another reading near the target would further cement expectations for a rate cut from the South African Reserve Bank (SARB) on Thursday. Economist polled by Reuters predict a 25 basis point cut.
“Most of this week’s attention will fall on the SARB’s interest rate decision… However, the domestic MPC (Monetary Policy Committee) is just one of three important central banks deciding on monetary policy,” ETM Analytics added.
The US Federal Reserve will announce its policy decision tomorrow.
Markets are betting the central bank of the world’s biggest economy will cut rates but are divided on the size of the cut.
The Bank of England is expected to keep its main lending rate unchanged when it announces its decision on Thursday.
South Africa’s benchmark 2030 government bond also gained in early deals, as the yield slipped 6,5 basis points to 8,85 percent. — Reuters
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