South African rand steady ahead of credit rating review

JOHANNESBURG (Reuters) – The South African rand was little changed in early trade on Friday, ahead of S&P’s sovereign credit rating review and talks by four U.S. Federal Reserve speakers that could move markets.

At 0625 GMT, the rand traded at 18.3850 against the dollar, not far from its previous close of 18.3725.

The dollar was also flat against a basket of global currencies.

S&P Global Ratings is scheduled to review South Africa’s sovereign credit rating on Friday.

In March, S&P downgraded its outlook to stable from positive, citing infrastructure constraints and a severe power crisis. In May it had held off from changing the country’s sovereign credit rating or outlook.

“USD/ZAR seems to want to naturally trend higher but … it’s run ahead of other markets and may need a breather. Event risk is moderately high given a lot of Fed talk late this afternoon,” said Rand Merchant Bank analysts in a morning briefing.

Talks by four Fed speakers on Friday may give hints on the future interest rate path of the world’s biggest economy.

Like other risk-sensitive currencies, the rand often take cues from global factors such as U.S. monetary policy.

South Africa’s benchmark 2030 government bond was slightly stronger in early deals, with the yield down 1 basis point to 10.040%.

(Reporting by Tannur Anders; Editing by Nellie Peyton and Stephen Coates)