South African rand pauses, resilience could be tested by Ukraine fears

South African rand coins are seen in this illustration photo taken October 28, 2020. REUTERS/Mike Hutchings/Illustration

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JOHANNESBURG, Feb 14 (Reuters) – The South African rand was stable early on Monday, but its recent resilience amid hawkish signals from global central banks could be tested by warnings that Russia could invade Ukraine in any time.

At 06:37 GMT, the rand was trading at 15.22 against the dollar, the same level as at its close on Friday.

The United States said on Sunday that Russia could create a surprise pretext for an attack on Ukraine, as it reaffirmed its commitment to defend “every inch” of NATO territory. Read more

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ETM Analytics analysts said the rand had been supported recently by South Africa‘s strong terms of trade, relatively high real yields and fresh reform promises from President Cyril Ramaphosa.

But the standoff over Ukraine has the potential to rattle global markets, they said in a research note.

Other potential factors this week include January consumer inflation figures (ZACPIY=ECI) and December retail sales (ZARET=ECI) on Wednesday. Economists polled by Reuters expect annual inflation to decline to 5.7% in January from 5.9% in December, while retail sales will rise 2.2% year-on-year in December from 3.3% in November.

Both releases will provide further clues to price pressures and the health of Africa’s most industrialized economy, as markets try to predict whether the South African Reserve Bank will raise its key rate (ZAREPO=ECI ) for the third consecutive time during its next monetary policy. meet in March.

The government’s benchmark 2030 bond was also little changed early Monday, yielding 9.19%.

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Reporting by Alexander Winning; Editing by Shailesh Kuber

Our standards: The Thomson Reuters Trust Principles.

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