Market News

JOHANNESBURG, Oct 14 (Reuters) – The South African rand weakened sharply on Wednesday after a hotter-than-expected US inflation reading boosted expectations that the Federal Reserve could raise interest rates later this month.

• At 1415 GMT, the rand traded at 16.62 against the dollar, about 0.8% weaker than its previous close.
• The dollar index, which measures the greenback against a basket of currencies, rose to 102.87, up 0.7% on Tuesday’s close.
• The US Consumer Price Index rose 0.6% last month after climbing 0.4% in August, the Labor Department’s Bureau of Labor Statistics said on Wednesday.
• Markets see about a 44% chance of a US rate hike this month, up from about 22% before the inflation data, and are pricing a 95% probability of an increase in December, according to CME’s FedWatch Tool.
• With no major domestic data due, the rand takes its cue from global developments, particularly US economic indicators and geopolitical events.
• On the Johannesburg Stock Exchange, the Top-40 index was last down 1%.
• South Africa’s benchmark 2035 government bond strengthened, as the yield fell 2 basis points to 8.74%.