Market News
South African rand gains as downbeat US data weakens dollar - REUTERS
BY Sfundo Parakozov
JOHANNESBURG, Nov 26 (Reuters) – The South African rand gained in early trade on Wednesday after muted U.S. economic data bolstered expectations of an interest rate cut by the Federal Reserve in December, weighing on the dollar.
Like other risk-sensitive currencies, the rand often takes cues from global drivers such as U.S. policy and economic data in addition to domestic releases.
The rand was up 0.3% at 17.17 to the dollar by 0708 GMT. The dollar was also down 0.2% against a basket of currencies.
Partner Content
Standard Bank CIB Impact Series
View All
The Crucial Link in East Africa’s Manufacturing Ambitions
Fuelling Industrial Growth and Development in West Africa
Borderless ambitions: unlocking intra-African trade through agro-industrial investment
“The focus at the moment appears to be on some downbeat data from the U.S., which has prompted investors to price in the rising probability that the Fed will reduce interest rates,” ETM Analytics said in a research note.
Bets on a quarter-point Fed rate cut next month have firmed over the past few sessions, driven by weak economic data and comments from central bank officials backing monetary easing.
On the domestic front, all eyes will be on producer inflation numbers due on Thursday and credit, trade and budget data on Friday.
On the Johannesburg Stock Exchange, the Top-40 index was up 1.4% in early trade.
South Africa’s benchmark 2035 government bond strengthened slightly, with the yield falling by 1.5 basis points to 8.595%.
