The Rand firmed on Wednesday as the dollar weakened after U.S. Federal Reserve Chairman Jerome Powell highlighted risks to the U.S. economy in remarks that could bolster expectations of an interest rate cut later this month.
The rand was also boosted by news that President Cyril Ramaphosa has re-appointed South African Reserve Bank Governor Lesetja Kganyago for another five-year term.
His current term is due to end on November 8. The Bank also appointed monetary policy committee members Nomfundo (Fundi) Tshazibana and Rashad Cassim as deputy governors.
At 1530 GMT the rand was 0.95% firmer at 14.0525 per dollar.
In prepared remarks to a congressional committee, Powell said concerns about trade policy and a weak global economy “continue to weigh on the U.S. economic outlook” and the Fed stood ready to “act as appropriate” to sustain a decade-long expansion.
“Federal Reserve Chairman Jerome Powell’s testimony to the US Congress is surprisingly more dovish than markets were expecting, given the US jobs data,” Bianca Botes, Treasury partner at Peregrine Treasury Solutions, said in a note.
The JSE all share gained 1.11% to 57,597.90 points and the top 40 1.15%. Gold miners rose 3.11% and banks 1.28%.
Emira fell 2.88% to R13.49. The property company said on Wednesday that it plans to acquire SA Corporate Real Estate.
Statistics SA is scheduled to release manufacturing and mining production figures for May. Analysts are expecting a 1.3% year-on-year rise for manufacturing, but a contraction of 2.4% for mining, according to the Bloomberg consensus.
The local currency was trading at R13.95 at 08:15 on Thursday morning, its strongest level since late April 2019.
Source: SA Commercial Property News http://www.sacommercialpropnews.co.za/south-africa-economy/9065-rand-strengthens-on-fed-s-chair-remarks-kganyago-reappointment.html