The rand was weaker on Wednesday morning as the dollar rebounded slightly from its recent losing streak ahead of the end of the US Federal Reserve’s two-day policy meeting, writes Andries Mahlangu.As one of the most liquid currencies‚ the rand is sensitive to global developments‚ which have taken centre stage‚ with domestic politics remaining in the background. Markets will be looking for some guidance from the Fed on how it plans to proceed with its rate raising cycle.
“Fortunately‚ with markets already pricing in a June rate hike at 66%‚ the Fed doesn’t have to work as hard to manage expectations as it did earlier this year and so any signal may be fairly subtle‚” Oanda market analyst Craig Erlam said.
“While I expect the central bank to see through the first-quarter weakness in the economy‚ it may refrain from sending a stronger signal in order to give itself room to manoeuvre‚ should the data not improve between now and the June meeting.”
The dollar index‚ which measures the greenback against major currencies‚ edged higher in early trade. But sentiment remained lacklustre‚ with several major Asian markets closed for a public holiday.
At 9.08am the rand was at R13.4002 to the dollar from Tuesday’s R13.3682‚ at R14.6233 to the euro from R14.6040 and at R17.3042 to pound from 17.2912.
The euro was at $1.0914 from $1.0925.
