South African rand strengthens as markets bet on less-hawkish Fed stance
The South African rand firmed in early trade on Monday, as the dollar fell sharply on expectations that the largest US bank failure since the 2008 financial crisis would prompt the Federal Reserve to slow the pace of its interest rate hikes.
At 08:35, the rand traded at 18.1875 against the dollar, about 0.8% firmer than its previous close.
The dollar was down 0.3% against a basket of global currencies, as investors speculated the Fed would no longer raise rates by 50 basis points this month after the sudden collapse of Silicon Valley Bank.
Investors will scrutinise Tuesday's U.S. inflation data to predict how hawkish the central bank will be.
The rand is likely to draw cues from dollar moves as there are no major South African economic data expected on Monday.
The government's benchmark 2030 bond also gained in early deals, with the yield down 10 basis points to 10.055%.
In company results, South African lender Absa Group reported a 13% rise in full-year profit on Monday, driven by a rebound in economic activity as the effects of the COVID-19 pandemic waned.
Mobile operator MTN Group reported a 16.9% rise in full-year earnings, but revised the medium-term profit margin target range for its South African business down due to power outages.
Reuters