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Rand softer in cautious pre-Fed trade

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Johannesburg - The rand fell to its lowest in a week against the dollar on Tuesday, with investors keen to minimise their risk exposure the day before a US Federal Reserve statement.

News that manufacturing workers had started returning to work after ending a four-week work strike failed to boost sentiment, as investors remain worried about the sickly state of the economy.

This was illustrated on Tuesday by Statistics South Africa data showing that unemployment edged up to 25.5% in the second quarter of this year from 25.2% in the first.

Just before close the rand was trading 0.38% softer from its close on Monday, at 10.6025 to the dollar.

"One gets the sense that there may be a little bit of position squaring off ahead of (the Fed statement) tomorrow [on Wednesday], followed by the US non-farm payroll data on Friday," said Nedbank foreign currency trader William van Rijn.

Rand bulls had also lost some steam after the currency failed to sustain a rally beyond 10.50, he added.

"Once that level failed to hold the market just wanted to take a little bit of risk off the table and take cover where necessary and await what could be a significant and price-moving event tomorrow," Van Rijn said.

Government bonds were largely flat, with the yield for the 2026 secondary market benchmark edging up half a basis point to 8.23%.

The yield for paper maturing next year closed unchanged at 6.655%.


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Rand - Dollar
18.94
-0.9%
Rand - Pound
24.10
-0.9%
Rand - Euro
20.59
-0.7%
Rand - Aus dollar
12.42
-0.9%
Rand - Yen
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-0.8%
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