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The South African rand held steady in early trading on Tuesday as investors adopted a cautious stance ahead of several major global developments, including a key U.S. interest rate decision and renewed hopes for a trade agreement between the world’s two largest economies.
By 0743 GMT, the rand stood at 17.2675 per dollar, reflecting a marginal dip of around 0.2% from its previous close.
Market analysts widely expect the U.S. Federal Reserve to implement a 25-basis-point rate cut during its meeting this week.
According to analysts at ETM Analytics, “The Fed will influence inflation and interest rate expectations and could materially impact how the USD trades. The U.S.-China trade talks could influence global risk appetite, while all the domestic data hold implications for domestic monetary policy and the impact that will have on the ZAR’s carry attractiveness.”
Locally, traders remain focused on a string of economic indicators due over the coming days that could help shape sentiment toward South Africa’s economy. These include data on money supply, private sector lending, the trade and budget balances, as well as producer inflation figures.
Activity on the Johannesburg Stock Exchange was muted, with the Top-40 index showing little movement.
South Africa’s benchmark 2035 government bond also demonstrated stability, trading with a yield of 8.885%.
