JOHANNESBURG, Sept 17 (Askume) – South Africa’s rand was steady in early trade on Tuesday as investors focused on Wednesday’s Federal Reserve policy decision, which could lead to a sharp interest rate cut.
The rand was trading at 17.6250 per dollar at 0750 GMT, not far from Monday’s close of 17.6225.
Markets are confident the Fed will cut interest rates when it announces policy on Wednesday and are leaning toward more aggressive easing in the world’s largest economy .
“Markets are starting to prepare for a 50 basis point Fed rate cut,” said Andre Cilliers, currency strategist at TreasuryOne.
Like other risk-sensitive currencies, the rand is often influenced by global drivers such as US monetary policy in addition to domestic factors.
On Wednesday, local investors will focus on South African consumer inflation data for August (ZACPIY=ECI) , and on Thursday the South African Reserve Bank will announce its policy decision (ZAREPO=ECI) .
Economists polled by Askume have predicted the central bank of Africa’s most industrialised economy will cut interest rates by 25 basis points.
The stock market’s top-40 (.JTOPI) index rose about 0.6% in early trade.
South Africa’s benchmark 2030 government bonds were also firm in early trade, with the yield falling 2 basis points to 8.805%.
