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Rand firms in early trade as dollar slips

Rand traded at R14.51 against the dollar, 0.38% firmer than its previous close.
Image: Waldo Swiegers / Bloomberg

The rand was firmer against a soft dollar early on Thursday, as investors weighed the US Federal Reserve’s commitment to keep interest rates low for some time against likely higher inflation.

At 0610 GMT, the rand traded at R14.51 against the dollar, 0.38% firmer than its previous close.

The dollar traded near more than two-week troughs versus major peers on Thursday, tracking Treasury yields lower.

Fed officials are committed to supporting the economy until its recovery is more secure, minutes of the US central bank’s most recent policy meeting released on Wednesday showed.

Lower US interest rate expectations boost investors’ appetite for emerging markets assets such as the rand, which offer higher returns but carry more risk.

In fixed income, the yield on the benchmark government bond due in 2030 was down 0.5 basis point to 9.325% in early deals.

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