Rand drops first time in three days

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Cape Town - South Africa’s rand weakened against the dollar for the first time in three days as investors weighed the outlook for US stimulus before today’s start of a Federal Reserve meeting.

The central bank in the world’s biggest economy may begin reducing its $85 billion of monthly bond purchases this week, according to 34 percent of economists in a December 6 Bloomberg survey, up from 17 percent in a November 8 poll.

The stimulus helped drive investment to emerging-market assets including South African bonds.

“All eyes in the financial markets this week are on the outcome of the Federal Open Market Committee meeting,” Mohammed Nalla, head of strategic research at Nedbank Group Ltd. in Johannesburg, said in e-mailed comments, referring to the Fed’s rate-setting body.

“Hopefully the outcome of this will provide the clarity the markets have been seeking.”

The rand weakened 0.1 percent to 10.2978 per dollar as of 9:48 a.m. in Johannesburg.

Yields on benchmark bonds due December 2026 dropped one basis point, or 0.01 percentage point, to 8.23 percent. - Bloomberg News


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