South Africa's rand rebounds ahead of rate decision, stocks slip

South Africa’s rand recovered on Wednesday from its weakest in a month after consumer inflation figures for August suggested interest rates will fall further, reviving economic growth.
Stocks were weaker as Sasol weighed on the market after announcing a dilutive share issue.
At 1530, GMT the rand was 0.32 percent firmer at 13.2675 per dollar, reversing losses of the last week-and-a-half caused by a report showing stronger U.S. inflation, which pushed it as low as 13.3500, its softest since August 15.
The rand has surrendered about 5 percent since Sept. 6, tumbling through crucial technical support that saw traders mark the currency for short-selling.
But the rand recovered on Wednesday after South Africa reported consumer inflation rose less than expected, to 4.8 percent year-on-year in August from 4.6 percent in July, the rand regained its footing.
The central bank concludes its three-day monetary policy committee (MPC) meeting on Thursday.
“...The September MPC is expected to deliver a further 25 basis points interest rate cut to 6.50 percent, as CPI inflation, and hence inflation expectations, moderate,” said Investec analyst Kamilla Kaplan in a note.
An announcement by the treasury that it had successfully issued a pair of dollar bonds in overseas capital markets worth $2.5 billion also aided the recovery.
Traders said the outcome of the U.S. Federal Reserve’s policy meeting later in the day would also affect the rand.
Bonds also firmed, with the yield on the benchmark debt due in 2026 falling 0.3 basis points to 8.405 percent.
On the stock market, the benchmark Top-40 index was down 0.4 percent at 49,575.88 points, while the broader All-share index declining 0.3 percent to 55,867.46 points.
Petrochemical company Sasol dropped to a two-month low after announcing a plan to issue new shares. Shares in Sasol slumped 6.4 percent to 373 rand.
Steinhoff Africa Retail (STAR) moved in the opposite direction on its market debut, closing at 21.52 rand, a 5 percent gain on its initial public offering price of 20.50 rand.
STAR, majority-owned by Steinhoff International, climbed as high as 22.46 rand on Wednesday, 9.6 percent above the IPO price. The IPO raised 15.3 billion rand ($1.2 billion), making it the biggest in Africa so far this year.