The rand was on track for a fourth consecutive day of gains on Monday morning, as investors looked ahead to the Federal Reserve and SA Reserve Bank monetary policy meetings this week.
The local currency touched an intraday best of R17.6217 “in line with a softer dollar and generally stronger emerging-market currencies”, said TreasuryOne currency strategist Andre Cilliers.
Cilliers said a break below the R17.65 level could result in the local currency firming further, but cautioned that the currency had struggled to get through this level at previous attempts.
The Federal open market committee (FOMC) will conclude its two-day meeting on Wednesday, where it is expected to deliver the first interest rate cut in more than four years.
According to the CME FedWatch tool, about 56% of traders expect a 25 basis point (bp) cut at the meeting, while 44% expect a larger 50bp cut.
The SA Reserve Bank’s monetary policy committee (MPC) meeting will deliver its interest rate decision on Thursday.
The Bank is widely expected to cut interest rates by 25bps to 8%, with a similar cut expected in November.
The repo rate was last adjusted in May 2023 when the MPC raised it by 50bps to 8.25%.
“It’s a busy week ahead, and one that will almost certainly see turbulence in the market,” said Citadel Global director Bianca Botes.
“Later in the week, both the Fed and the [Reserve Bank] will be watched closely as they deliver their interest rate decisions. Investors will take a particular interest in the size of the cut by the Fed and any forward guidance central bank officials might offer,” said Botes.
At 10.50am, the rand had firmed 0.47% to R17.6629/$, while it was little changed at R19.6392/€ and R23.2837/£. The euro was 0.43% firmer at $1.1121.
In the commodities markets, gold gained 0.33% to $2,585.95/oz and platinum 0.15% to $994.08/oz. Brent crude was unchanged at $72.11 a barrel.
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