The rand softens as oil prices rise, Fed in focus

The rand was under pressure in early trade on Wednesday as higher oil ​prices fuelled inflation concerns, while investors awaited the United States ‌Federal Reserve’s policy decision later in the day for clues on the interest rate outlook. At 06:52 GMT, the rand ​traded at R16.68 against the dollar, down 0.2% ​from its previous close. Oil prices rose more than 1% ⁠on Wednesday after an attack on a refinery ​in Saudi Arabia renewed concerns around supply risks from ​the major exporter Markets are awaiting the Fed’s policy decision at 18:00 GMT, as well as Personal Consumption Expenditures data, a key ​inflation gauge closely watched by the central bank, ​on Thursday. Traders largely expect the Fed to leave rates unchanged on ‌Wednesday ⁠but are pricing in an 84% chance of a December rate hike, according to the CME’s FedWatch Tool. ETM Analytics said the rand could weaken beyond the ​R17.00-per-dollar level if ​rising oil ⁠prices and Fed-related pressures persist. Without major domestic data, the rand, like other emerging market currencies, tends to follow global factors, including US economic releases and geopolitical developments. On the Johannesburg Stock Exchange, the Top-40 index was ⁠down ​about 0.2% in early trade. South ​Africa’s benchmark 2035 government bond weakened in early deals, with the yield ​rising 2 basis points to 8.6%