JOHANNESBURG, May 25 (Reuters) – South African Rand reached its highest level in 22 months early Tuesday as the US dollar drifted lower after Federal Reserve officials allayed investor concerns about inflation, which was forcing interest rates to rise.
At 6:49 am GMT, the rand ZAR = D3 traded at 13.8550 against the dollar, 0.54% firmer than its previous fence.
“The rand continues to occupy a limited trading range; current rand levels below-14.0000 remain attractive to USD buyers; these have, however, been in limited volumes,” Nedbank analysts said in a client note. .
The US dollar weakened after accommodating comments from Fed speakers supported the view that policy tightening in the United States was unlikely to arrive anytime soon.
The fall in US interest rates reinforces the attractiveness of riskier but high-yield assets such as the rand.
In bonds, the yield on the benchmark government bond due 2030 ZAR2030 =fell 2 basis points to 8.94%, reflecting higher prices.
(Reporting by Olivia Kumwenda-Mtambo; Editing by Devika Syamnath)
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