Rand widely unchanged ahead of Fed decision
CAPE TOWN – The rand traded almost directionless against the dollar ahead of the interest rates announcement bu the US Federal Reserve on Thursday.
At 5pm the domestic currency was bid 4c weaker than Wednesday’s same time bid at R14.02 a dollar. Against the pound the rand was widely unchanged at R18.37 as well as with the euro the at R16.03.
Senior currency dealer at TreasuryONE Andre Botha said the US Fed announcement would be a non-event and that most of the market moves will be as a result of the hangover from Wednesday.
“We have the US Fed announcement tonight regarding their interest rate and we expect the rate to stay unchanged.”
On a more domestic focus manufacturing production recovered notably in the third quarter, despite low confidence levels and many headwinds.
The depreciation in the rand exchange rate in the third quarter seems to have provided a much-needed buffer to the other challenges the sector faces, according to NKC. However, many of the headwinds are still present and could still strain the sector in coming quarters.
NKC analyst Elize Kruger the outcome was much worse than market expectations of +1.7 percent year on year. “However, despite the disappointing outcome in September, the sector accelerated by 7.1 percent quarter on quarter, seasonally adjusted, in the third quarter compared to 0.7 percent quarter on quarter in the second quarter and will thus be a notable positive contributor to GDP growth in the quarter.”
BUSINESS REPORT ONLINE