South Africa's rand starts week on the front foot
JOHANNESBURG, Sept 9 (Reuters) - South Africa's rand strengthened against the dollar on Monday, with momentum reignited by upbeat remarks from the U.S. Federal Reserve chairman and a Chinese economic stimulus package.
At 0734 GMT the rand ZAR=D3 was 0.34% firmer at 14.7700 per dollar from an overnight close of 14.8200.
Fed Chair Jerome Powell said on Friday in Zurich the central bank will continue to act "as appropriate" to sustain the economic expansion in the world's biggest economy, sticking to a phrase that financial markets have read as signalling further interest-rate reductions ahead.
Powell's remarks came as the Chinese central bank moved on Friday to cut how much cash banks must hold in reserve, releasing liquidity to shore up an economy hit by the Sino-U.S. trade conflict.
Easing policy is also expected in the Eurozone later this week when the European Central Bank (ECB) governing council meets.
"Risk-on trading patterns stemming from this move will be positive for emerging market assets this week," Rand Merchant Bank's Siobhan Redford said in a note.
Locally, investors will this week set their eyes on manufacturing and mining production data, which will provide an indication of the activity in the primary and secondary sectors of the economy.
"We expect the rand to trade sideways today and drift around the 14.80 level, but "risk-on" is still evident in the market thus we have a slight bias toward the rand drifting stronger," Andre Botha, Senior Dealer at TreasuryONE said in a note.
In equities, the broader All-Share index .JALSH inched up 0.04% to 55,615 points, while in fixed income the yield on the benchmark government bond due in 2026 ZAR186= stood at 8.15%.
(Reporting by Nqobile Dludla, editing by Ed Osmond)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.