JOHANNESBURG (Reuters) -The South African rand weakened on Thursday, as the U.S. dollar surged to its highest levels in two decades propelled by weakness in its major rivals.
At 1620 GMT, the rand traded at 16.0675 against the dollar, around 1.29% weaker than its previous close.
As well as declines in currencies like the euro and Japanese yen, the dollar has been bolstered by bets that the Federal Reserve will hike interest rates decisively this year, including a 50-basis-point move in May.
The rand lost more than 6% against the greenback last week as severe power cuts by struggling utility Eskom and devastating floods reminded investors of the constraints to South Africa’s economic growth outlook. It has fallen more than 2% more this week.
Data on Thursday showed South Africa’s producer inflation rose to 11.9% year on year in March from 10.5% in February, more than expected, but that did little to affect rand trading.
March money supply, budget and trade figures are expected on Friday.
In the equities market, stocks continued to recover from a global rout earlier this week, with investors appearing to be buying the dip.
Local investors have been taking their cue from Asia and Wall Street this week, as the news cycle has been dominated by global events.
On Thursday, Asian stocks and Wall Street gained, thanks to strong earnings from Facebook parent Meta Platforms.
The Johannesburg All-Share index rose 1.81% to 71,534 points, while the Top-40 index climbed 1.92% to 64,551 points. Miners, banks and telecoms led the gains, up 2.07%, 1.25% and 1.73% respectively.
The government’s benchmark 2030 bond dropped, with the yield rising 14.5 basis points to 10.03%.
(Reporting by Alexander Winning and Nqobile Dludla; Editing by Amy Caren Daniel)
