Reuters
1 minute read
22 May 2017
11:52 am

Rand gains as Trump factor weighs on dollar

Reuters

The SARB announces a policy decision on Thursday, with markets anticipating it will keep interest rates on hold at 7 percent.

Rands. File photo.

South Africa’s rand extended gains on Monday as unease about political developments in Washington weighed on the dollar and kept demand for emerging market currencies steady.

* At 0640 GMT, the rand gained 0.32 percent to 13.1975 per dollar compared to a close of 13.2400 in New York on Friday.

* The rand ended the previous week on the front foot but is seen by traders remaining stranded in a range with upper limit of 13.45.

* The South African Reserve Bank (SARB) announces a policy decision on Thursday, with markets anticipating it will keep interest rates on hold at 7 percent.

* Economists polled by Reuters a week after Fitch Ratings Agency and Standard and Poor’s downgraded South Africa to “junk”, said the downgrade would push out rates cuts to 2020.

* The release of minutes of the U.S. central bank’s policy committee meeting, local political wrangling over a March cabinet reshuffle and a Moody’s country visit are seen as major factors.

* Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0.44 percent.

* In fixed income, the yield for the benchmark government bond due in 2026 fell 1.5 basis points to 8.66 percent. (Reporting by Mfuneko Toyana; editing by John Stonestreet)