XM does not provide services to residents of the United States of America.

South African rand cools after strong gains in data-filled week



<html xmlns="http://www.w3.org/1999/xhtml"><head><title>South African rand cools after strong gains in data-filled week</title></head><body>

JOHANNESBURG, Sept 20 (Reuters) -The South African rand softened in early trade on Friday, cooling off after strong gains in a week that saw interest rate cuts by both the U.S. Federal Reserve and the South African Reserve Bank (SARB), plus a local inflation print.

At 0715 GMT, the rand traded at 17.50 against the dollar ZAR=D3, about 0.1% weaker than its previous close.

The local unit has gained about 1.4% against the greenback this week.

"The rand is likely to remain within a R17.40/R17.70 range in the short term as it tracks international moves but we could see further profit-taking, given the rand's recent strong run," said Andre Cilliers, currency strategist at TreasuryONE.

The Fed cut interest rates by 50 bps on Wednesday, weakening the dollar and boosting the risk-sensitive rand.

Also on Wednesday, data showed that South Africa's annual inflation rate fell to 4.4% last month, the lowest since April 2021 and just below the mid-point of the central bank's 3% to 6% target range.

The SARB joined the easing club when it announced a 25 basis point (bps) rate cut ZAREPO=ECI on Thursday, the first time interest rates have been reduced in four years.

"We believe that the SARB has now entered a cycle of rate cuts," said Volkmar Baur, Commerzbank FX analyst, in a research note.

"Further rate cuts are likely to follow, but these should not weigh on the rand if they are accompanied by structural improvements in the economy," Baur added.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index .JTOPI was little changed in early trade.

South Africa's benchmark 2030 government bond ZAR2030= was slightly weaker in early deals, as the yield gained 3 basis points to 8.88%.




Reporting by Tannur Anders
Editing by Ros Russell

</body></html>

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.