South Africa’s rand nearly unchanged after Fitch’s ratings decision

The Fitch Ratings logo is seen at their offices at Canary Wharf financial district in London,Britain, March 3, 2016. REUTERS/Reinhard Krause

JOHANNESBURG – South Africa’s rand held firm against the dollar on Thursday, after Fitch affirmed the country’s both long-term foreign and local currency debt ratings and positive global sentiment pushed it to a four-and-a-half month high in the previous session.

Rand was trading at 14.310 versus the greenback at 0506 GMT, a 0.07% rise from the previous day’s close, when it hit 14.2670, its highest level since July 31.

Fitch on Wednesday decided to leave the country’s credit rating at one notch below junk with a negative outlook.

“We can expect the rand to test a sustained break below R14.30 with a range of R14.28 to R14.40 on the cards for now,” Peregrine Treasury Solutions said in a note.

It added that globally, markets would also be watching retail sales data and an interest rate decision from the United Kingdom, and later job and home sales data from the United States.

While local factors can have an impact, the rand is highly sensitive to global sentiment and has benefited recently from optimism over a U.S.-China trade deal.

Government bonds were flat, with the yield on benchmark 2026 instrument up 0.05 basis points to 8.29%.

Reporting by Emma Rumney; Editing by Rashmi Aich

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