Rand firms slightly as markets await Fed's Warsh speech at Jackson Hole

The rand edged higher in early trade on Friday, with dealers holding off on bigger moves ahead of a closely watched speech by US Federal Reserve chair Kevin Warsh at the Jackson Hole symposium.

By 7am, the local currency was trading at 15.9725 to the dollar, up 0.2% on its previous close. The US dollar index, which tracks the greenback against a basket of major currencies including the yen and the euro, ticked up slightly to 99.18.

Investors were awaiting Warsh's first major address at Jackson Hole, Wyoming, due at 2pm GMT, for any signal on how he intends to approach monetary policy, inflation and the recent bout of volatility in bond markets.

Expectations for fresh guidance were muted, however, given Warsh's past reluctance to offer explicit direction on future interest rate moves.

Analysts at ETM Analytics said that while the broader bias for the dollar-rand pair still points to further rand strength, enough uncertainty remains in the picture to make investors wary of betting too heavily on continued gains for the local currency.

As with other risk-sensitive currencies, the rand typically takes its lead from global developments, including US economic data and policy signals.

Locally, attention will also turn later on Friday to the National Treasury's release of July budget balance figures, which should offer further insight into the state of South Africa's public finances.

On the equities front, the JSE's Top 40 index was around 1% higher in early trade, while South Africa's benchmark 2035 government bond was little changed, with its yield holding at 8.455%.

SOURCE: CNBC Africa