JOHANNESBURG (Reuters) -The South African rand was flat in early trade on Wednesday, mirroring most emerging market currencies, as investor concerns over a prolonged U.S. government shutdown drove demand for safe-haven assets.
At 0648 GMT the rand traded at 17.25 against the dollar, little changed from Tuesday’s close.
The dollar index, which measures the greenback’s strength against a basket of currencies, traded 0.3% firmer, while gold pushed through $4,000 an ounce to hit a record level on Wednesday.
The U.S. government shutdown entered its seventh day on Tuesday and has postponed the release of key economic indicators from the world’s biggest economy, forcing investors to rely on secondary, non-government data to gauge the timing and extent of Fed rate cuts.
“Despite expectations of a Federal Reserve rate cut, the USD remains robust, supported by the U.S’ political and economic uncertainties,” said ETM Analytics in a research note, adding that this has translated into the rand losing some ground.
Like other risk-sensitive currencies, the rand often takes cues from global drivers such as U.S. policy and economic data.
South Africa’s benchmark 2035 government bond edged up in early deals, as the yield fell 1.5 basis points to 9.165%.
(Reporting by Sfundo Parakozov; Editing by Hugh Lawson)
