Johannesburg — The South African rand was little changed in early trade on Monday, at the start of a week in which central bank interest rate decisions in major global economies are the focus.
At 0635 GMT, the rand traded at 17.9850 against the dollar, just shy of its previous close of 17.9800.
The dollar was also broadly steady against a basket of global currencies.
Rand Merchant Bank (RMB) said in a morning briefing that the rand should be weaker than its current level versus the dollar given the greenback’s gains and weakness in emerging markets last week.
“But (the rand) doesn’t show much impetus to go anywhere,” RMB said.
The South African currency will likely take its direction this week from a U.S. Federal Reserve rate announcement on Wednesday and a European Central Bank one on Thursday, as the local economic data calendar is relatively light.
Markets are expecting rate hikes in the U.S. and Europe, after the South African Reserve Bank kept rates unchanged last week after 10 consecutive hikes.
“(A) hawkish Fed could see (the dollar/rand exchange rate) snap higher,” RMB added.
Local data releases this week include a central bank leading business cycle indicator (ZALEAD=ECI) on Tuesday and June producer inflation (ZAPPIY=ECI) on Thursday.
South Africa’s benchmark 2030 government bond was also broadly stable, with the yield at 10.335%.
*Tannur Anders, editing: Alexander Winning – Reuters
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