Rand steady after overnight post-Fed losses

JOHANNESBURG (Reuters) – The South African rand recovered some of its poise against the dollar on Thursday after retreating sharply overnight when the U.S. Federal Reserve surprised global markets with a fairly hawkish policy statement.

Traders awaited the latest unemployment and producer inflation numbers, and the outcome of a central bank conference on inflation targeting for a steer on whether domestic interest rates might increase next month.

The rand was at 10.9470 against the dollar at 0638 GMT, barely moved from where it ended Wednesday's session in New York.

Government bonds weakened in early trade, with the yield for the instrument maturing in 2026 – the benchmark for the secondary market – adding 4 basis points to 7.935 percent.

The local unit pulled back from a 7-week high of 10.8240 overnight after the Fed came out with an unexpectedly hawkish policy tone and conveyed its confidence in the U.S. economic recovery, boosting the greenback.

"Early trade today will remain dominated by reaction to the Fed. Mid-day risks come from the euro zone economic sentiment index figures," RMB currency analyst John Cairns said.