South African rand gains as Fed signals fewer hikes for 2019


JOHANNESBURG  – South Africa’s rand traded stronger early Thursday, after the U.S. Federal Reserve raised interest rates as widely expected, but painted a neutral picture for 2019.

At 0600 GMT, the rand traded at 14.3525 versus the dollar, 0.2 percent stronger than its previous close.

With little domestic data and tepid market activity, the South African currency is tracking global trends this week.

On Wednesday, the U.S. central bank’s ‘dot plots’ signalled two rate hikes for next year, down from three previously.

A slower path of monetary policy tightening in the world’s largest economy should relieve some pressure on emerging market currencies such as the rand.

South African government bonds were flat early on Thursday, with the yield on the benchmark instrument due in 2026 at 9.10 percent. (Reuters)