South African rand weaker on Fed meeting expectations

THE South African rand fell on Monday, as investors bet the U.S. Federal Reserve will announce that it will wrap up its bond purchases sooner than expected at a meeting this week.

At 1644 GMT, the rand traded at 16.0075 against the dollar, around 0.2% weaker than its previous close, with concerns about a surge in domestic COVID-19 cases also weighing on the rand.

The dollar (.DXY) was 0.2% stronger against a basket of currencies.

The Fed’s two-day gathering wraps up on Wednesday, with clues about the timing of interest rate increases next year also in focus.  

A flurry of South African economic data releases including the November consumer price index (ZACPIY=ECI), producer inflation (ZAPPIY=ECI) and a leading business cycle indicator (ZALEAD=ECI) are also due on Wednesday.

In fixed income, the yield on the benchmark 2030 government bond was down 1 basis point to 9.48%.

Stocks fell slightly, with the Johannesburg Stock Exchange’s Top-40 Index (.JTOPI) slipping 0.33% to 65,177 points and the broader All-Share Index (.JALSH) losing 0.36% to 71,430 points.

Retailer Shoprite (SHPJ.J) rose 1.71%. It said on Monday it had entered into a joint venture agreement with a delivery partner in a drive to grow its e-commerce business. 


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