Johannersburg — South Africa's rand traded steadily against the US dollar on Monday as investors remained cautious amid the ongoing Middle East conflict and awaited key US inflation data that could influence the Federal Reserve's interest-rate decisions.
At 0633 GMT, the rand traded at 16.50 per dollar, unchanged from its previous close, as global economic uncertainty continued to shape currency-market sentiment.
The US dollar index, which measures the greenback against a basket of six major currencies, was also steady but remained close to an 18-month high reached last week.
Investors are now turning their attention to Wednesday’s US Consumer Price Index (CPI) report, one of the final major economic indicators due before the Federal Reserve’s monetary policy meeting later this month.
The inflation figures could provide fresh insight into whether US policymakers will maintain interest rates or consider further increases to contain price pressures.
The Federal Reserve raised interest rates last month for the first time since 2023, seeking to rein in inflation. Markets are closely monitoring incoming economic data to assess whether another rate increase is likely.
According to the CME FedWatch tool, traders were pricing in an 81% probability that the Fed would leave interest rates unchanged at its October meeting, up from 51% a month earlier.
ETM Analytics warned that a stronger-than-expected US inflation reading could revive expectations of further monetary tightening, potentially putting the rand’s recovery under pressure.
With no major domestic economic data scheduled for release, the South African currency is likely to remain sensitive to international developments, particularly US economic indicators, movements in the dollar and geopolitical tensions in the Middle East.
South Africa's benchmark 2035 government bond was also flat in early trading, with its yield holding at 8.795%.
Source: Reuters
Reporting: Nilutpal Timsina
Editing: Louise Heavens
