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Tuesday, August 16, 2022

South African rand under pressure before U.S. midterm elections

South African rand under pressure before U.S. midterm electionsJOHANNESBURG: South Africa’s rand weakened in early trade on Tuesday, in line with falls in stocks amid subdued investor appetite for riskier assets ahead of U.S. midterm elections later in the day.

At 0650 GMT, the rand traded at 14.1175 per dollar, 0.11 percent weaker, having closed in New York at 14.1625.

The currency is expected to trade in a range of 14.1000 to 14.4000 to the dollar on Tuesday, NKC African Economics said in a note.

The rand remained under pressure as markets favoured caution ahead of U.S. midterm Congressional elections, as policy decisions that could sway the economy, corporate decision-making and consumer spending hinge on the results.

Emerging market assets will likely respond inversely to movements in the U.S. dollar after the elections.

Government bonds were firmer early on Tuesday, with the yield on the benchmark instrument due in 2026 down 4 basis points at 9.110 percent.

Stocks were set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.37 percent.

Copyright Reuters, 2018


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