The South African (SA) Rand started the week on the front foot on Monday, helped by stronger global risk appetite linked to growing expectations of a Federal Reserve interest rate cut next month.
The Rand and other risk sensitive assets dropped sharply last week, hurt by concerns over the state of the United States (US) economy and loft equity market valuations.
But Wall Street closed higher on Friday, and that optimism carried over into Monday.
The Rand traded at 17.3425 against the Dollar, up about 0.2% on Friday’s closing level.
SA’s benchmark 2035 government bond was marginally firmer in early deals, with the yield down 2.5 basis points at 8.635%.
This week will see a flurry of local economic data releases including a leading business cycle indicator on Tuesday, producer inflation figures on Thursday, and credit, trade and budget data on Friday.
Last week SA’s central bank resumed its interest rate cuts, which could lessen the Rand’s appeal for carry trades, where an investor borrows money in a low-interest-rate currency and uses it to invest in a higher interest rate currency, analysts said.
–Reuters–
