JOHANNESBURG – South Africa’s rand traded slightly stronger early Tuesday, helped by a fragile dollar as markets counted down to a crucial U.S. Federal Reserve meeting amid speculation it will soon hit the pause button to its monetary tightening cycle.
At 0645 GMT, the rand traded at 14.3500 versus the dollar, 0.3 percent stronger than its previous close.
The dollar index was marginally lower at 97.08 after losing 0.4 percent on Monday, as some investors speculated growth worries could prompt the U.S. Fed to signal a pause to its monetary tightening cycle at this week’s meeting.
The U.S. economy, which has been growing strongly this year, has started to show signs of fatigue.
South Africa-focused investors will look to a central bank business cycle indicator on Tuesday for clues about the health of Africa’s most industrialised economy.
The South African economy enjoyed a strong start to the fourth quarter after sluggish performance earlier in the year, when it briefly fell into recession.
Government bonds were also stronger in early deals on Tuesday, with the yield on the benchmark instrument due in 2026 down 3.5 basis points to 9.170 percent.
Stocks were set to open weaker at 0700 GMT, with the Johannesburg Stock Exchange’s Top 40 futures index down 1.5 percent. (Reuters)