South Africa’s rand appreciated in early trading on Monday due to a weaker dollar as investors prepared for the upcoming US presidential election and the Federal Reserve’s announcement regarding interest rates later this week.
“The US presidential election on November 5 is the main event this week, eclipsing even the Federal Reserve’s interest-rate decision two days later,” said Jee-A van der Linde, a senior economist at Oxford Economics, in a research note.
As the world’s largest economy approaches election day on Tuesday, Republican candidate Donald Trump and Democratic candidate Kamala Harris are nearly neck-and-neck in the opinion polls. On Thursday, investors will be focused on the Federal Reserve’s upcoming interest rate decision, with expectations leaning towards a 25-basis-point rate cut.
“These developments will be the main driving forces for financial market,” van der Linde added.
The yield on South Africa’s standard 2030 government bond remained steady in initial transactions, holding at 9.32%.