JOHANNESBURG, July 31 (Reuters) – South Africa’s rand strengthened early on Wednesday, ahead of a much-anticipated policy decision by the Federal Reserve.

At 0718 GMT, the rand traded at 18.22 against the dollar, about 0.6% stronger than its previous close.

Investors focus will be on the Fed on Wednesday for clues on the future interest rate trajectory of the world’s biggest economy. The central bank is expected to leave rates unchanged, but markets are betting on a cut at its September meeting.

“The rand is likely to continue to trade in an R18.20/R18.45 range ahead of the (meeting),” Andre Cilliers, currency strategist at TreasuryONE, said.

Domestic investors will also be looking at June trade balance data to be released by Statistics South Africa later in the day.

On the stock market, the Top-40 index was up 1.2%.

South Africa’s benchmark 2030 government bond firmed in early deals, with the yield down 3.5 basis points to 9.470%.

(Reporting by Bhargav Acharya; Editing by Andrew Heavens)