Picture: GALLO IMAGES/FOTO24/LOANNA HOFFMAN
Picture: GALLO IMAGES/FOTO24/LOANNA HOFFMAN

THE rand was weaker against the dollar at midday on Tuesday as risk-averse investors prepared for the US Federal Reserve’s policy update and its potentially widespread market influence.

No change in US interest rates is expected but its updated view of the economy and markets will be critical.

Meanwhile, the Bank of Japan (BoJ) left its monetary policy unchanged on Tuesday, but downgraded its view of the economy, opening the door to further action in the months ahead, Dow Jones Newswires reported.

Markets are also waiting for interest rate decisions by the South African Reserve Bank and the Bank of England on Thursday.

At 11.31am, the rand was at R15.6243 to the dollar from R15.5375 at Monday’s close. It was at R17.3363 against the euro from R17.2471 and R22.1533 against the pound from R22.2240. The euro was at $1.1093 from $1.1101 previously.

The week opened with the rand trading in the mid R15.20s to the dollar. Having shown some resilience over recent sessions, the rand traded weaker due to demand for dollars.

Nedbank CIB analysts said this was fuelled by the caution ahead of various central bank announcements this week, along with the comments from Finance Minister Pravin Gordhan that apparently failed to inspire investors.

No local data releases are scheduled for Tuesday. From Europe, French consumer price index (CPI) and eurozone unemployment data are due for release.