August 24, 2020
The South African rand started the week on a firmer footing on Monday, as traders looked to the Federal Reserve’s annual Jackson Hole retreat for guidance on the outlook for U.S. monetary policy.
At 0737 GMT, the rand traded at 17.0475 per dollar, 0.57% firmer than its close on Friday.
The trend in U.S. interest rates will have a key influence on global prospects and investors’ appetite for risk, including for emerging market assets such as South Africa.
“All eyes are on the annual Jackson Hole symposium this week as markets continue to seek guidance on U.S. monetary policy as the U.S. economy remains strained,” said Bianca Botes, executive director at Peregrine Treasury Solutions in Pretoria.
“The broader themes of U.S.-China tensions, the U.S elections and a U.S. recovery all remain in play in the currency market.”
Federal Reserve Chairman Jerome Powell will discuss monetary policy on Thursday at the opening day of the Kansas City Fed’s annual symposium.
Locally, traders await consumer price inflation figures on Wednesday as well as producer price inflation data on Thursday.
On the stock market, both the Top-40 index and the broader all-share were up more than 1% in early trade.
In fixed income, the yield on the benchmark government bond due in 2030 was flat at 9.265%.