Rand Breaks Through R16 Barrier as Fed Hopes Fade

The South African rand has broken through the R16 barrier against the US dollar after comments from US Federal Reserve Governor Christopher Waller eased expectations of a rate hike this month.

Waller's more cautious stance on monetary policy, where he urged policymakers to 'give disinflation a chance', led to a sharp shift in financial-market expectations. The probability of a US rate hike at the September meeting fell to about 50%, from 63.2% earlier, while US Treasury yields declined.

The weaker dollar provided additional support for emerging-market currencies such as the rand, which briefly traded as low as R15.97/$ during Thursday's session. The currency had come under pressure earlier in the week following hawkish comments from US Federal Reserve Chair Kevin Warsh.