South Africa’s rand was little changed early on Wednesday as traders took profits on the dollar and braced for more volatility, with hopes fading for a trade truce between the United States and China.
At 0645 GMT the rand was up 0.1% at 15.2575 per dollar, a small move off its overnight low of 15.3050.
On Tuesday, the rand shed nearly 1% as risk sentiment was battered by the standoff between the United States and Turkey over Syria and then by Washington’s imposing visa restrictions on Chinese officials.
The rand is one of the most liquid and frequently traded emerging-market currencies, and a high degree of foreign investment makes it sensitive to offshore events and swings in risk sentiment.
“The rand’s underperformance yesterday could continue through the week, with key topside resistance levels in the 15.40-15.50 region likely to be eyed as investors will be hard-pressed to look favourably on a rand,” ETM Analytics said in a note to clients.
The local session will see the release of September business confidence index, followed by the release after the close of the Federal Reserve’s minutes of its last meeting.
The South African Chamber of Commerce and Industry’s monthly Business Confidence Index fell to a three-decade low in September, underlining the fragile state of Africa’s most advanced economy.
Bonds were slightly higher, with the yield on the benchmark 2026 paper down 1.5 basis points to 8.265%.