The South African rand fell, influenced by a decrease in foreign reserves.
The short-term outlook for the rand tends to be positive.
Written by Ziad Abdel Fattah:
The South African rand declined during Transactions Early Tuesday, after the central bank announced a decline in the country's foreign exchange reserves during June, as investors await the release of the US Federal Reserve's meeting minutes to anticipate the monetary policy path.
The rand fell by about 0.3%, trading at 16.2425 against the U.S. dollar, compared with the previous session's close.
Net foreign exchange reserves fell to $71.34 billion
South Africa's central bank data showed a decline in net foreign exchange reserves to $71.34 billion at the end of June, down from $73.47 billion at the end of May, increasing pressure on the local currency.
Globally, the US dollar stabilized against a basket of major currencies, as investors focused on the minutes of the US Federal Reserve's June meeting, looking for indications regarding future monetary policy directions, while oil prices recorded a slight increase as markets monitored supply and demand developments.
The short-term outlook for the rand remains biased to the upside.
ETM Analytics, in a research note, said the short-term outlook for the rand remains tilted to the upside, as long as global investors continue to channel their investments into high-liquidity emerging market assets.
In the stock market, the index of the 40 largest companies on the Johannesburg Stock Exchange fell by 0.5% at the start of trading, while the yield on South African government bonds maturing in 2035 rose by 2.5 basis points to 8.22%, indicating a decline in bond prices.
