JOHANNESBURG – South Africa’s rand steadied in early trade on Monday, but looked vulnerable to risk aversion before the U.S. Federal Reserve’s monetary policy meeting this week and a referendum of Britain’s potential exit from the European Union next week.
At 0645 GMT, the rand traded at 15.2350 per U.S. dollar, not far off its New York close of 15.2420 on Friday.
“Dollar strength and risk aversion threaten the rand,” Rand Merchant Bank analyst John Cairns said in a note.
“Event risk is focussed on Tuesday’s (South Africa) current account data and Wednesday’s Fed meeting but it will probably be sentiment, particularly towards the dollar, that drives markets this week.”
The central banks of the United States, Japan, Britain and Switzerland all hold policy setting meetings this week, but investors expect them to stand pat given uncertainty over the looming UK referendum.
Stocks were set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.93 percent.
In fixed income, the yield for the benchmark instrument due in 2026 added 8.5 basis points to 9.155 percent.