South Africa's rand reversed earlier losses against the dollar on Tuesday finding some reprieve as investors held their breath ahead of a local rates decision after the unit slid over one percent in the previous session.
Rand gains ahead of rates call, stocks open lower
In the past two weeks the rand has struggled to hold on to gains past the 13.25 resistance, leaving it open to a retreat beyond 13.50.
Stocks opened lower on South Africa's blue-chip Top-40 index, which was down 0.48 percent by 0703 GMT.
At 0900 GMT, the rand had reversed some losses, edging 0.3 percent firmer to 13.4280 per dollar, inching away from the 13.4950 1-week trough it touched overnight in New York.
The dollar had firmed during the previous session after comments from United States Federal Reserve officials pointed to the bank resuming policy tightening by year-end after leaving interest rates on hold last week.
The South African Reserve Bank's (SARB) decision on interest rates is due on Wednesday.
A Reuters poll showed 28 of 31 economists expecting the repo rate to remain steady at 6.00 percent.
South Africa's statistics agency publishes consumer and producer inflation data ahead of the rate decision.
"The monetary policy announcement tomorrow could give investors some clues as to how SARB is going to react to U.S. Fed movements in next few months," analysts at NKC African Economics said.
"The expectation is for an initial pullback towards 13.3500 with 13.4000 first stop, this should be used to load up on some cheap dollars," said Maemo Rametse of Standard Bank.
Yields on government bonds inched lower although sentiment towards emerging market assets remained subdued by concerns over global growth. The benchmark 2026 issue had shed 0.5 basis points to 8.355 percent in early trade.
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