News Column

Market Report

May 22, 2014

THE rand edged firmer against the dollar yesterday, boosted by higher-than-expected inflation |data that led foreign currency traders to price in an interest rate increase this week.

At mid-afternoon the rand was trading at 10.4095 versus the dollar, recovering from a session low of 10.4750 and up 0.29 percent from where it ended New York trade on Tuesday.

"The rand was a little bit weaker this morning but is doing quite well this afternoon. The CPI numbers were a bit higher than expected and it looks like the foreign exchange market is discounting higher |interest rates tomorrow," said |Bidvest Bank chief dealer Ion |De Vleeschauwer.

Headline consumer inflation quickened to 6.1 percent year-on-year in April, slightly above market expectations, from 6.0 percent in March, Statistics South Africa data showed.

This signal that price pressures are rising could nudge the Reserve Bank into hiking interest rates when it concludes its third policy meeting of the year today, adding to a 50 basis point increment in January.

Government bonds were lifted by rekindled offshore interest in South African assets. - Reuters

Cape Argus

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Source: Cape Argus (South Africa)

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