In South Africa Rand, bonds flat ahead of U.S. Fed

At 0654 GMT the rand was changing hands against the dollar at 13.6875 after ending Tuesday trade in New York at 13.6800.

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South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg January 17, 2013. REUTERS/Siphiwe Sibeko play South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg January 17, 2013. REUTERS/Siphiwe Sibeko
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South Africa's rand and government bonds were mostly flat in early Wednesday trade, with guidance seen mostly coming from global markets ahead of a U.S. Federal Reserve policy statement.

The Top-40 futures index on the JSE securities exchange was also steady, pointing to a similar start for the local bourse at 0700 GMT.

South African rand notes in a file photo. REUTERS/Siphiwe Sibeko play South African rand notes in a file photo. REUTERS/Siphiwe Sibeko

 

At 0654 GMT the rand was changing hands against the dollar at 13.6875 after ending Tuesday trade in New York at 13.6800.

Traders and analysts said the U.S. Federal Reserve's policy statement, due out later in the session, would be an important guide as to the next direction of the market.

Investors expecting policy tightening to resume this year in the world's biggest economy have offloaded emerging market assets which offer higher yields but carry greater risk.

A five rand coin is displayed at the South African Mint in a file photo. play A five rand coin is displayed at the South African Mint in a file photo. (Reuters/ Juda Ngwenya)

 

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This has helped push the rand nearly 20 percent weaker against the dollar in 2015.

The outlook for U.S. rates has, however, become cloudy recently, with some economic data coming out weaker than expected.

Gold bars are displayed at South Africa's Rand Refinery in a file photo. play Gold bars are displayed at South Africa's Rand Refinery in a file photo.

 

"The chances of a hawkish Fed tonight are being priced out of the market," Standard Bank trader Warrick Butler said in a note to clients.

Government bonds eased marginally from previous closing levels, with the yield on paper maturing in 2026 adding just half a basis point to 8.385 percent.

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