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South African rand extends gains; eyes on Fed minutes

South African rand extends gains; eyes on Fed minutes

19 August 2020

 

South Africa’s rand edged higher in early trade on Wednesday, extending the previous session’s gains, on dollar weakness and sustained optimism over a further easing of the country’s coronavirus lockdown.

With no major domestic data releases this week, the rand is expected to track global cues, including the release of U.S. Federal Reserve minutes.

At 0647 GMT, the rand traded at 17.2850 versus the dollar, more than 0.2% stronger than its previous close.

 

Government bonds were marginally firmer, as the yield on the 2030 bond dipped 0.5 basis point to 9.285%.

Local financial markets shrugged off the resumption of planned power cuts by ailing state electricity utility Eskom on Tuesday. Further outages are due on Wednesday after breakdowns at the utility’s creaking coal-fired power station fleet.

Eskom’s struggles to power Africa’s most industrialised economy are one of the main reasons why investors are downbeat on the growth outlook. Other reasons include the perilous state of public finances and weak investment dynamics.

Source: Reuters
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