South African rand firms as traders await Powell’s speech by Reuters

JOHANNESBURG (Reuters) – The South African rand strengthened in early trade on Friday as traders awaited a speech by U.S. Federal Reserve Chairman Jerome Powell that could provide clues about the future path of interest rates in the world’s largest economy .

At 0751 GMT, the rand was trading at 17.98 against the dollar, about 0.3 percent firmer than its previous close.

Powell is due to speak later on Friday at an annual meeting of global central bakers in Jackson Hole, Wyoming, and markets are looking for clues on whether US interest rate cuts will begin in September.

“The nature of these speeches is normally that not much will be revealed, but nevertheless the market will go over the speech with a fine-toothed comb,” said Andre Cilliers, currency strategist at TreasuryONE.

“Should new information emerge, expect the market to be volatile around the speech,” Cilliers added.

Like other risk-sensitive currencies, the rand often takes cues from global factors such as US monetary policy in the absence of major local factors.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index rose about 0.4 percent in early trade.

South Africa’s benchmark 2030 government bond was slightly stronger in early trade, with the yield down 1.5 basis points to 9.195%.