The rand was steady at about R17.50/$ on Tuesday afternoon, supported by an easing dollar amid improved global market sentiment.
At 6pm it was little changed at R17.53/$, after earlier reaching its strongest level in just over two weeks.
Citadel Global director Bianca Botes said the dollar eased as investors bet on US Federal Reserve rate cuts, with attention turning to Thursday’s inflation data for confirmation. She said markets were now even pricing in a small possibility of a 50 basis point (bps) rate cut by the Fed.
A cut is expected after August jobs data showed slower US job growth and a rise in unemployment to 4.3%, the highest in almost four years.
August’s labour market data has paved the way for what some analysts describe as a “catch-up” 50bps cut at the upcoming federal open market committee (FOMC) meeting. According to the CME FedWatch Tool, markets are pricing in a 90% chance of a 25bps cut and a 10% probability of 50bps cut.
Locally, SA’s economy grew 0.8% in the second quarter according to Stats SA data released on Tuesday, the strongest quarterly growth in more than a year and marking a notable acceleration from the revised 0.1% recorded in the first quarter.
The JSE was 0.6% firmer, taking its cue from global markets.
The Fed will announce its decision on rates on September 17.
With Jana Marx
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.