South Africa’s rand eased early on Wednesday, as cheer over COVID-19 vaccine developments faded and investors looked ahead to a rates decision by the local central bank later this week.
At 0600 GMT, the rand ZAR=D3 was 0.1% weaker at 15.3950 per dollar, little changed from its closing level overnight, as investors opted for caution and favoured safe havens with surging novel coronavirus cases in Asia as winter set in.
A spike in infections have driven record hospitalisations and fresh restrictions on gathering in the United States, while new outbreaks vex authorities in Japan, South Korea and Australia. with only retail sales for September due for release ahead of Thursday’s lending rates decision — the last for the year — and credit ratings reviews by Standard & Poor’s and Moody’s due on Friday, trade on the rand was also cautious.
The South African Reserve Bank (SARB) is likely to leave the repo rate at a record low at its Nov. 19 meeting and over the coming year too, a Reuters poll of economists found. But a small chance of a cut has kept bulls in wait-and-see mode. continue to provide a steady stream of dollars whilst just recently we have seen some offshore investors relinquishing their SA bond holdings, which has equated to the rand pretty much doing nothing,” said chief trader at Standard Bank (JO:SBKJ), Warrick Butler, in a note.
Bonds were slightly firmer in early deals. The yield on the benchmark 2030 government issue ZAR=D3 was down 1.5 basis points to 8.815%.