UPDATE 1-South Africa's rand steady ahead of Fed minutes, stocks down

  • Reuters
  • Forex News
UPDATE 1-South Africa's rand steady ahead of Fed minutes, stocks down
Credit: © Reuters.

(Updates prices, adds analysts)

JOHANNESBURG, May 22 (Reuters) - South Africa's rand steadied in afternoon trade on Wednesday as markets positioned for the release of minutes from the Federal Reserve's latest meeting that might give more clues on the U.S. interest rate outlook.

Stocks were dragged down by Sasol SOLJ.J as the South African petrochemicals firm raised the expected cost of its U.S. ethane cracker project by $1 billion. 1530 GMT the rand ZAR=D3 was trading at 14.3825 per dollar following a close of 14.3800 overnight in New York.

For much of this week, a dearth of domestic economic and political drivers has exposed it to offshore factors dominated by the U.S.-China trade standoff.

The Fed minutes will be released at 1800 GMT.

South Africa-focused investors also await the central bank's interest rates decision on Thursday.

A Reuters poll of economists and analysts conducted last week forecast rates will stay at 6.75%, with the bank resisting pressure to lower them to support flagging economic growth. are on the ... subsequent statement by Reserve Bank Governor Lesetja Kganyago tomorrow, with ...interest rates expected to remain unchanged," Bianca Botes, a corporate treasury manager at Peregrine Treasury Solutions, said in a note.

In fixed income, the yield on the benchmark government bond due in 2026 ZAR186= dipped by 6 basis point to 8.41%.

On the bourse, the broader All-Share index .JALSH declined 0.53% to 55,231 points, while the blue chips on the Top-40 index .JTOPI slipped 0.59% to 49,194 points.

Leading the downside was Sasol, which fell 13% to 375 rand, while property investment company Redefine RDFJ.J declined 6.7 percent to 9.05 rand.

" Sasol is going to have to raise more funds, and they're looking to raise $2 billion... For the most part, it's not a pretty picture," said Ryan Woods, a trader at Independent Securities.

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