The South African rand remained relatively stable in early trade on Tuesday, as markets awaited the Federal Reserve Chair’s testimony in Washington and U.S, report from Reuters. June inflation data for insights on the future interest rate trajectory.
At 0644 GMT, the rand traded at 18.1300 against the dollar, close to its previous close of 18.1175.
“The rand opened marginally softer at 18.13 this morning, and we expect trading to remain range-bound in the short term,” said Andre Cilliers, currency strategist at TreasuryONE.
Markets are closely monitoring Fed Chair Jerome Powell’s testimony in Washington on Tuesday and Wednesday, along with the upcoming U.S. June inflation data, for indications on the future interest rate path in the world’s largest economy.
“Analysts will be evaluating the Fed’s response to the recent softer U.S. economic and labor data, with markets already starting to price in two rate cuts this year,” Cilliers added.
The risk-sensitive rand often responds to global factors such as U.S. economic policy in the absence of significant local drivers.
South Africa’s benchmark 2030 government bond showed slight strength in early deals, with the yield down 1 basis point at 9.74%.