South African rand firms as traders wait for Powell speech
4:17 am Friday, August 23rd, 2024
JOHANNESBURG (Reuters) – The South African rand strengthened in early trade on Friday, as traders awaited a speech by U.S. Federal Reserve Chair Jerome Powell that may give hints about the future interest rate path of the world’s biggest economy.
At 0751 GMT, the rand traded at 17.98 against the dollar, about 0.3% firmer than its previous close.
Powell is due to speak later on Friday at an annual meeting of global central bakers in Jackson Hole, Wyoming, and markets are looking out for clues on whether U.S. interest rate cuts will start in September.
“The nature of these speeches is normally that not too much will be revealed, but nevertheless, the market will go over the speech with a fine tooth comb,” said Andre Cilliers, currency strategist at TreasuryONE.
“Should any new information be forthcoming, expect the market to be volatile around the speech,” Cilliers added.
Like other risk-sensitive currencies, the rand often takes cues from global drivers such as U.S. monetary policy in the absence of major local factors.
On the Johannesburg Stock exchange, the blue-chip Top-40 index was up about 0.4% in early trade.
South Africa’s benchmark 2030 government bond was slightly stronger in early deals, with the yield down 1.5 basis points to 9.195%.
(Reporting by Tannur Anders; Editing by Helen Popper)
