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South Africa’s rand holds firm within range vs dollar

It had closed in New York closer to 10 rand/dollar, at 9.9815.

The rand firmed within a range against the dollar early on Wednesday, getting a boost from a greenback hurt by the lack of a debt deal out of Washington late on Tuesday.

The rand was up 0.3 percent on the dollar at 9.9520 by 0643 GMT.

It had closed in New York closer to 10 rand/dollar, at 9.9815, while the dollar was buoyed by optimism that U.S. lawmakers would reach a deal late on Tuesday to stop the political impasse over raising the debt ceiling before Thursday’s deadline.

The lack of a plan by Wednesday trade to avert a U.S. debt default puts some pressure on the dollar with the uncertainty making investors nervous.

Hopes pinned on last ditch efforts by lawmakers to agree on a plan is expected to keep the dollar supported and the rand trading in a range.

“A 9.9000-10.000 range is expected until a U.S. budget deal is secured. Whilst the market continues to tentatively put its faith in U.S. lawmakers to ultimately get their act together, the dollar will remain bid and EMEA currencies in tight ranges,” said Christopher Shiells of Informa Global Markets.

Domestic retail sales data for August is due at 1100 GMT, where economists expect growth to have slowed to 1.2 percent year-on-year, from 2.8 percent in July as consumers struggle under rising fuel prices and over-indebtedness.

Yields on government benchmark bonds were steady at 7.94 percent on 2026 debt.

The Treasury will announce issuance plans for next week’s weekly auction at 0900 GMT. ($1 = 9.9583 South African rand) 

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