Johannesburg - The rand traded cautiously against the dollar ahead of
the budget speech on Wednesday in which Finance Minister Nhlanhla Nene
is expected to keep his budget deficit target unchanged from October
forecasts.
South Africa has been dogged by the uncomfortably high
fiscal and budget deficits recently, often putting the currency under
pressure in times of heightened global risk aversion.
At 07:10 GMT, the rand was at R11.4725/$, unchanged from last night's close in New York.
The rand failed to make further gains overnight after receiving a lift on Tuesday supported by better-than-expected fourth quarter economic growth numbers.
Traders cited caution hours before the budget speech. "Of course all eyes and most importantly those of the credit rating agencies will be on the local budget speech this afternoon," said Warrick Butler, a trader at Standard Bank.
"The most important details to look out for will be the forecasts on the twin deficits as well as their growth forecasts. Tax hikes are almost a given," he added.
Economists polled by Reuters expect Nene to announce a budget deficit target of 3.6% of gross domestic product for the fiscal year starting in April.
Bonds were firmer with the yield on the benchmark government bond maturing in 2026 down one basis point to 7.555%.
At 07:10 GMT, the rand was at R11.4725/$, unchanged from last night's close in New York.
The rand failed to make further gains overnight after receiving a lift on Tuesday supported by better-than-expected fourth quarter economic growth numbers.
Traders cited caution hours before the budget speech. "Of course all eyes and most importantly those of the credit rating agencies will be on the local budget speech this afternoon," said Warrick Butler, a trader at Standard Bank.
"The most important details to look out for will be the forecasts on the twin deficits as well as their growth forecasts. Tax hikes are almost a given," he added.
Economists polled by Reuters expect Nene to announce a budget deficit target of 3.6% of gross domestic product for the fiscal year starting in April.
Bonds were firmer with the yield on the benchmark government bond maturing in 2026 down one basis point to 7.555%.
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