Rand edges up amid rate review jitters

iStock

Johannesburg - The rand was a touch firmer against the dollar on Wednesday, but was unlikely to post significant gains during the week as investors fretted about Friday's credit rating review from Standard & Poor's.

Stocks were set to open softer, with the JSE securities exchange's Top 40 futures index down 0.5% from Tuesday's close.

At 08:50 the rand traded at R15.6900/$, up 0.1% from where it ended New York trade overnight.

Traders said data on Tuesday showing a trade surplus for the second month in a row had provided a minor boost for the rand, although the cumulative balance for this year is in deficit.

Another positive headline for the currency this week has been the conditional approval for Anheuser-Busch InBev to acquire SABMiller [JSE:SAB], a deal which should see dollars flow into South Africa if it gets the final nod from regulators.

But overall, investors are likely to be jittery towards South African assets ahead of Friday's sovereign rating review by S&P which could result in a downgrade into sub-investment grade.

"I therefore see no reason to get uber-bullish on the rand just yet because of this (AB InBev) announcement," Standard Bank forex trader Warrick Butler cautioned.

"I am in the watch and wait camp," he added, predicting a 15.60 to 15.90 trading range for dollar/rand for the day.

In fixed income, the yield on the benchmark issue due in 2026 dipped 1 basis point to 9.38%.

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