Rand steadies as investors wait on US fed rates, stocks down
At 1500 GMT the rand was 0.37% firmer after two consecutive sessions of losses as a spike in global oil prices.
JOHANNESBURG - The rand steadied on Wednesday as fears of an oil price spike eased and investors waited for a US Federal Reserve interest-rate decision.
At 1500 GMT the rand was 0.37% firmer after two consecutive sessions of losses as a spike in global oil prices and fears tensions in the Middle East would further dampen local business conditions pushed the currency to a 2-week low.
Brent crude oil futures fell 0.36%, to $64.32 a barrel by 1530 GMT, after tumbling 6.5% the previous session.
Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday average oil production in September and October would be 9.89 million barrels per day, and that the world’s top oil exporter would ensure full oil supply commitments to its customers this month.
“Saudi Arabia came out and said that they’ve got a lot of production back...the market took that really, really well. That’s obviously good for risky assets like the rand,” said Wayne McCurrie, executive portfolio manager at FNB Private Wealth.
Expectations that the US Federal Reserve will lower lending rates on Wednesday also boosted risk sentiment
Local inflation figures for August showed a 0.3% increase to 4.3%, slightly higher than a Reuters survey of economists which predicted a slight uptick in year-on-year price growth to 4.2% from 4% in the previous month.
In equities, stocks fell for a second session, with the Johannesburg All-share index down 1.19% to 56,220 points, while the blue-chip Top-40 index declined 1.45% to 50,134 points.
Dragging the bourse downwards were luxury goods company Richemont, down 5.95% to R109.44, while Naspers shed 3.36% to R2475.00, and insurer Discovery slipped 2.38% to R125.36. “All the big rand hedge shares were down today...the local market was heavily influenced by the rand and the prospects for the rand,” McCurrie said.
Bonds also firmed, with the yield on the benchmark paper due in 2026 down 1 basis point to 8.220%.