The South African (SA) Rand was steady in early trade on Monday as investors remained cautious amid the Middle East conflict and awaited key United States (US) inflation data later this week for clues on the Federal Reserve’s interest-rate path.
The Rand traded at 16.50 against the Dollar, unchanged from its previous close.
The Dollar index, which measures the greenback’s strength against a basket of six currencies, was steady but remained not far from the 18-month peak it scaled last week.
Investors’ focus is shifting to Wednesday’s US Consumer Price Index (CPI) report, one of the last major data releases before the Federal Reserve’s late-October policy meeting.
The Federal raised rates last month for the first time since 2023 to rein in inflation, with markets keeping a close watch on economic data to gauge whether policymakers may move again.
Traders are pricing in an 81% chance of the Fed standing pat this month, up from 51% a month earlier, the CME FedWatch tool showed.
ETM Analytics in a note said a stronger-than-expected US CPI reading could revive expectations of further Fed tightening and test the rand’s recovery.
With no major domestic data due, the rand takes its cue from global developments, particularly US economic indicators and geopolitical events.
SA’s benchmark 2035 government bond was flat in early trade, with the yield at 8.795%.
–Reuters–
