S.Africa’s rand wobbles on mixed U.S. Fed comments

0

U.S. Federal Reserve Chair Janet Yellen testifies before the House of Representatives Financial Services Committee on Capitol Hill in WashingtonSouth Africa’s rand fluctuated against the dollar before closing flat on Friday, after cautious remarks from the U.S. Federal Reserve failed to pull the local currency out of a recent slump.

The rand softened 0.01 percent to 10.7065 per dollar by 1524 GMT, after touching both the higher and lower ends of a recent range following the Jackson Hole conference.

The local unit had slipped back into decline after snapping a four-day losing streak in the previous session.

Federal Reserve chair Janet Yellen, speaking at the much-anticipated central banking conference, said U.S. labour markets remained hampered by the 2008 recession, and that “there [was] no simple recipe for appropriate policy”.

Yellen signalled that the Federal Reserve would move cautiously in deciding when to raise interest rates.

“Yellen said there is nothing simple going ahead, but has warned about rate hikes coming sooner and that has probably put our rand on the back foot,” said Cheslyn Francis, a currency trader at Afrifocus in Cape Town.

“The rand is taking a cautious note,” Francis added.

Comments from Standard & Poor’s on Thursday, that it was not looking to downgrade South African banks after a Moody’s cut earlier in the week, gave some support to the rand in early trading but it failed to build any momentum.

Market watchers expect the rand to remain range bound, between 10.65 and 10.75, before Statistics South Africa releases second quarter GDP figures next Tuesday.

Government bonds weakened, with yields on both the 2015 paper and the paper due in 2026 up 0.5 basis points, to 6.54 percent and 8.205 percent respectively.

 

This site uses Akismet to reduce spam. Learn how your comment data is processed.