Market News
South African rand muted as investors mull over U.S-China trade deal - REUTERS
JOHANNESBURG, Oct 30 (Reuters) – The South African rand was muted in early trade on Thursday, as investors digested the hawkish rate cut from the Federal Reserve and the trade deal made by U.S. President Donald Trump and Chinese President Xi Jinping on rare earths.
At 0635 GMT the rand traded at 17.2075 against the dollar, a whisker away from its previous close of 17.19.
“The Fed rate decision and Trump/Xi meeting, certainly caused some movement last night. The ZAR is now trading on par, given what has happened and the gold price is edging up,” said Adam Phillips, treasury specialist at Umkhulu Treasury.Domestic investor attention will shift to producer inflation at 0930 GMT, and budget balance data around 0900 GMT for clues on the health of Africa’s largest economy.
Economists polled by Reuters expect producer inflation to edge up to 2.6% in September from 2.1% the previous month.
“Rising food prices are expected to push producer inflation up to 2.7% in September,” said Nedbank Economists in a research note, adding that meat prices continue to be the main cause of acceleration in price increases because of efforts to combat foot-and-mouth disease.
South Africa’s benchmark 2035 government bond traded weaker with yield rising 5 basis points to 8.895%.
