By Ebi Kesiena
The South African rand declined against the dollar on Wednesday as traders eagerly awaited the release of the Federal Reserve’s meeting minutes, hoping for insights into the interest rate trajectory of the world’s largest economy.
By 1501 GMT, the rand was trading at 18.2475 to the dollar, about 1% weaker than its previous close. This followed a peak on Tuesday where the rand hit 18.0300, its strongest level since August.
Meanwhile, the dollar was trading around 0.17% stronger against a basket of global currencies.
The Federal Reserve is scheduled to publish the minutes of its most recent meeting on Wednesday, and market participants are keen to find clues regarding the pace and timing of future rate cuts.
“Markets will look for clues within the statement around the pace and timing of rate cuts in the world’s largest economy,” stated Shaun Murison, senior market analyst.
Like other emerging market currencies, the risk-sensitive rand is significantly influenced by global drivers such as U.S. monetary policy, in addition to local economic data.
Meanwhile, according to data from the statistics agency on Wednesday, on the domestic front, South Africa’s headline consumer inflation fell to 5.2% year-on-year in April from 5.3% in March, this rate remains within the South African Reserve Bank’s target.
