Rand firms as oil price climb runs out of steam
The rand was firmer against major global currencies on Wednesday morning‚ bolstered a little by easing concerns over the rising oil price.
Higher than expected US inventory numbers have helped quell market concerns over rising fuel costs‚ analysts said‚ although further data on inventories due later on Wednesday will also be closely watched.
All eyes are on the US Federal Reserve monetary policy announcement due after local markets close‚ with the Fed widely expected to raise interest rates by 25 basis points.
The market has priced in a 100% probability of a increase‚ and focus will rather be on the tone of the announcement and the Fed's forward guidance for future increases‚ said Rand Merchant Bank analyst Nema Ramkhelwana-Bhana.
US treasury yields have climbed above the psychologically important 3% mark‚ and a hawkish Fed statement is expected to spark a dollar rally‚ with the greenback having been under pressure so far this week.
Local data is light‚ with focus on Thursday’s producer inflation numbers. Inflation is widely expected to have moderated slightly in August from July‚ with analysts citing the government's fuel price reprieve and subdued food inflation as contributing factors.
At 9:50am the rand was at R14.2923 to the dollar from R14.3506‚ at R16.8145 to the euro from R16.8856 and at R18.8046 to the pound from R18.916. The euro was at $1.1764 from $1.1766.
The bid on the benchmark R186 government bond was last seen at 9.125% from 9.145%.
Brent crude was at $81.952 a barrel from $81.432.