South African rand firms after dovish Fed, focus on Ramaphosa speech

  • Reuters
  • Forex News
South African rand firms after dovish Fed, focus on Ramaphosa speech
Credit: © Reuters.

JOHANNESBURG, June 20 (Reuters) - South Africa's rand raced to a five-week high and government bonds firmed on Thursday after the U.S. Federal Reserve signalled possible interest rate cuts later this year, sending the dollar and U.S. Treasury yields lower.

At 0645 GMT, the rand ZAR=D3 traded at 14.2750 per dollar, 0.31% firmer than New York close on Wednesday. The currency was trading at its best levels since May 16.

In fixed income, the yield on the benchmark government bond due in 2026 ZAR186= dipped 11 basis points to 8.07%.

The market's main focus for the day will be on President Cyril Ramaphosa's 'State of the Nation' address at 1700 GMT.

Ramaphosa is expected to give details of an Eskom support package as pressure mounts on him to deliver on his election pledge to jump-start flagging growth and avoid losing the country's investment-grade credit rating.

"After the market has digested the signals from the Fed more or less, the President's State of the Nation Address should come into focus for the rand in the evening," Commerzbank (DE: CBKG ) analysts wrote in a note.

"If he succeeds in showing a promising strategy here, the rand should benefit. But in view of the ... tasks ahead of him, the potential for disappointment is also high."

Stocks were set to open higher at 0700 GMT, with the JSE securities exchange's Top-40 futures index ALSIc1 up 0.92%.

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  • Kgotso Selepe @Kgotso Selepe
    Ramaphosa should stop tip toeing around eskom
    Like 3
    • Lethabo Mampana @Lethabo Mampana
      yes
      Like 0
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