South Africa’s rand continues to see solid gains

South Africa’s commodity-linked rand edged higher in early trade on Wednesday, boosted by record gold prices as markets awaited interest rate decisions from the United States and Africa’s most industrialised economy.

At 0652 GMT, the rand traded at 15.8150 against the dollar, roughly 0.3% up on Tuesday’s close and at its strongest level since June 2022.

Gold, a major South African export, broke through $5,200 for the first time on Wednesday, as the dollar plunged to a near four-year low amid persisting geopolitical concerns and ahead of a U.S. Federal Reserve monetary policy decision later in the day.

Wichard Cilliers, head of market risk at TreasuryONE, said markets expect the Fed to keep rates on hold and will be watching for clues on the pace and timing of future cuts.

The rand, like other risk-sensitive currencies, often takes cues from global drivers such as U.S. policy.

Investors’ focus will pivot to South Africa’s first interest rate announcement of 2026 on Thursday, where 18 of 26 analysts polled by Reuters expected the central bank to leave its repo rate unchanged, and eight predicted a 25-basis-point rate cut to 6.50%.

Other domestic releases this week include producer inflation numbers on Thursday, while money supply, private sector credit, trade balance and budget balance figures are all due on Friday.

“The rand is well-positioned to appreciate further for now, especially against the dollar,” ETM Analytics said in a research note, adding that a firmer currency could ease pressure on importers, help curb inflation, and create room for lower interest rates to support a broader credit recovery.

South Africa’s benchmark 2035 government bond also gained in early deals, with the yield falling 6.5 basis points to 8.045%.

• Reporting by Sfundo Parakozov; Editing by Andrew Heavens.