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South Africa's rand steadies, investors eye Fed meeting
(Adds stocks, updates levels, adds rand comment)
JOHANNESBURG, March 19 (Reuters) - South Africa's rand
steadied on Tuesday as the prospect of rolling blackouts and
downbeat economic data offset expectations that a dovish tone at
this week's U.S. Federal Reserve policy meeting could lift
emerging market assets.
At 1637 GMT, the rand traded at 14.4425 per dollar,
0.02 percent weaker than its New York close on Monday.
The Fed's two-day meeting starts later on Tuesday. Money
markets are pricing in a 99 percent probability of U.S.
borrowing costs not being altered on Wednesday.
"A dovish Fed will trigger a risk-on rally for risk assets.
But the rand's gains will be curbed by rolling blackouts and
sales data that is likely to disappoint," RMB analyst Mpho Tsebe
said in a note.
Caution prevailed among investors as South Africa's power
utility said it would continue implementing power cuts on a
rotational basis as it struggles with generating capacity
Analysts say power cuts, which have happened in several
rounds since June last year, are one of the reasons why business
confidence has slumped in recent months.
Statistics South Africa is scheduled to publish February
consumer price inflation figures and January retail sales data
In fixed income, the yield on the benchmark government bond
due in 2026 rose 6.5 basis points to 8.76 percent.
Stocks meanwhile rose, with the Johannesburg All-Share index
up 0.14 percent to 56,849 points, while the Top-40
Index firmed 0.17 percent to 50,475 points.
Commodity stocks lead the bourse higher as palladium surged
past $1,600 for the first time on Tuesday on expectations that
an already strained supply scenario for the autocatalyst metal
could worsen, while platinum soared 3 percent.
Gold also joined other precious metals to benefit from a
weaker dollar going into the Fed meeting.
Sibanye-Stillwater jumped 8.45 percent to 16.56
rand, Lonmin Plc climbed 4.85 percent, and Impala
Platinum rose 2.56 percent to 67.22 rand.
(Reporting by Olivia Kumwenda-Mtambo and Nqobile Dludla;
Editing by Jan Harvey)
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