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#RandReport: Rand firms ahead of expected Fed rate hike, stocks flat

At 1515 GMT, the rand had firmed 0.8% to 13.0500 against the dollar as most emerging market currencies gained.

Picture: EWN.

JOHANNESBURG – The rand firmed against the dollar on Wednesday as investors awaited the US Federal Reserve's interest rate decision and the clues it would reveal in its monetary policy outlook. Stocks were flat.

At 1515 GMT, the rand had firmed 0.8% to 13.0500 against the dollar as most emerging market currencies gained against the retreating greenback.

"It's pretty much well known that there's a good chance of them hiking tonight," said TreasuryOne currency dealer Phillip Pearce.

The US Federal Reserve was due to release its policy statement at 1800 GMT, with the central bank widely expected to raise interest rates for the second time in three months.

"There's a lot more focus on their tone, that they're going to be a lot more hawkish and expecting more hikes later on this year," Pearce said.

An increase in South Africa's business sentiment index also supported the rand, but the gains were anchored by weaker than expected retail sales numbers.

"Weak consumer confidence, household credit demand and high unemployment will contain household expenditure growth during the first half of 2017," FNB Economist Mamello Matikinca said in a note.

Government bonds strengthened, with the yield on the 2026 benchmark down four and a half basis points to 8.655%.

On the stock market, the benchmark Top-40 index was up 0.01% at 44,655 points, while the broader All-share index was unchanged at 51,701 points.

Johannesburg-listed iron ore and steel producers gained as the prices of these industrial materials rose on hopes of demand in China.

Iron ore futures in China surged more than 5% as steel prices rose to their strongest in more than three years as the government of the world's second largest economy spurs infrastructure spending and property sales rise.

Shares in ArcelorMittal South Africa, the largest steelmaker listed on the local bourse, rallied 7% to R12.45, while Kumba Iron Ore rose 2.6% to R195.63.

Hotel and gambling firm Sun International was the biggest loser on the JSE, shedding 14.8% to R74.95 after flagging a drop in half-year profit.

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