Cape Town - The rand fluctuated between gains and losses as it headed for a second weekly advance against the dollar on speculation that US policy makers will provide clarity on plans to scale back monetary stimulus.
The US currency strengthened against all except two of its 16 major counterparts before a report that economists said will show retail sales accelerated in the world’s biggest economy, boosting bets the Federal Reserve will start tapering bond purchases next week.
The South African central bank will leave the key repurchase rate unchanged at 5 percent on September 19, according to all 12 economists in a Bloomberg survey.
“A return of Fed fears has broken the incipient rally in emerging-market currencies,” John Cairns, a strategist at Rand Merchant Bank in Johannesburg, said in an e-mail.
“Data risk is high given all the US figures due this afternoon. Expect jumpy and nervous trade.”
South Africa’s currency gained as much as 0.3 percent and weakened as much as 0.2 percent before trading less than 0.1 percent higher at 9.9671 per dollar as of 10:35 a.m. in Johannesburg, bringing its advance in the week to 0.5 percent.
Yields on 10.5 percent bonds due December 2026 were little changed at 8.16 percent for a decline of 24 basis points this week.
Foreign investors bought a net 1.81 billion rand ($182 million) of South African bonds yesterday, according to JSE Ltd. data. - Bloomberg News