JOHANNESBURG (Reuters) -The South African rand gained on Wednesday as investors braced for a day headlined by the Federal Reserve’s decision and signs of easing U.S.-China trade tensions.
At 1414 GMT, the rand traded at 17.11 against the dollar, up about 0.2% on Tuesday’s close.
“The ZAR put in a strong performance from yesterday afternoon. It is higher against all the majors, even with the gold price staying below $4,000.00,” said Adam Phillips, treasury specialist at Umkhulu Treasury.
Phillips added that South Africa’s risk-sensitive rand was mainly buoyed by expectations of a 25 basis point rate cut by the Fed later and U.S. President Donald Trump’s meeting with Chinese President Xi Jinping on Thursday.
Data from the South African Reserve Bank earlier showed that M3 money supply growth last month was at 6.07%, down from 6.18% in August. Credit growth for September came in at 6.03%, above August’s 5.86% and exceeding the 5.85% forecast in a Reuters poll.
“We expect the upturn in credit to gain momentum in the months ahead. Company loans have been more robust than we expected, pointing towards a recovery in fixed investment over the third quarter,” Nedbank economists said in a research note.
Domestic investor attention will shift to producer inflation, budget balance data on Thursday and trade balance figures on Friday for clues on the health of Africa’s largest economy.
On the Johannesburg Stock Exchange, the Top-40 index was last up 0.7%.
South Africa’s benchmark 2035 government bond also firmed, with the yield falling four basis points to 8.845%.
(Reporting by Anathi Madubela and Sfundo Parakozov; Editing by Janane Venkatraman and Alison Williams)
