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Rand dips in thin trade ahead of U.S. Fed

folarin okunola

April 26, 2016 7:53 PM

By 0645 GMT the rand had slipped 0.23 percent weaker to 14.4845 per dollar after trading as low as 14.5600 overnight, extending the previous session's losses that saw the unit fall as much as one percent.

South African Rand coins are seen in this photo illustration taken September 9, 2015. REUTERS/Mike Hutchings

South Africa's rand continued to weaken early on Tuesday, succumbing to thin liquidity ahead of a national holiday and modest appetite globally for emerging assets as investors awaited a rates decision in the United States.

Government bonds were slightly weaker, with the benchmark paper due in 2026 adding 1 basis points to 9.115 percent.

The unit has given up a recent rally towards key technical resistance around 14.0000, and now looks likely to hold above 14.6200 with scope for more weakening, traders said.

"The dreary rand outlook also reflects the global environment — international markets are in wait-and-see mode in front of the Fed," currency strategist at Rand Merchant Bank John Cairns said in a note.

The U.S. Federal Reserve's policy committee is expected keep lending rates on hold on Wednesday, with market focus zooming in on any changes in the bank's tone, particularly if it looks to prepare markets for hikes in interest rates in coming months.

Stocks were due to open flat, with the JSE securities exchange's Top-40 futures index up only 0.04 percent.

folarin okunola

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