South Africa's rand stable; caution high ahead of British referendum
South Africa’s rand distanced from seven week highs against the dollar on Wednesday, with traders and analysts expecting caution on the evening of the British EU referendum.
South African economic headlines have taken a backseat in shifting the currency this week. Despite this, inflation data due out at 0800 GMT could boost it slightly if higher than expected, increasing the prospect of higher interest rates this year.
At 0653 GMT the rand traded at 14.7290 to the dollar, which comes close to its previous close at 14.7350.
The rand had decreased by about 10 cents from Tuesday’s high of 14.6225, the rand’s strongest level since May 4 which followed a rise in risk appetite as investors bet on Britain remaining in the EU after tomorrow’s vote.
"Optimism in financial markets ahead of the UK referendum has tempered ahead of the vote tomorrow," South Africa’s Standard Bank said.
Government bonds edged higher in early trade, with the yield for debt due in 2026 dropping 2 basis points to 8.97.