(Reuters) -South Africa’s rand firmed on Tuesday, as the dollar fell due to cooling expectations for a full percentage-point Federal Reserve Bank interest rate hike next week.
At 1553 GMT, the rand traded at 17.0500 against the dollar, 0.44% stronger than its previous close.
The dollar index, which measures the U.S. currency against six major peers, fell around 0.77% to 106.60, well below the high of 109.29 it hit last week. [nL1N2Z01CQ]
However, a material rand recovery appears unlikely until signs emerge that global stagflationary pressures are beginning to ease, ETM Analytics said in a note.
Local investors will be looking at the rest of the week for key economic data points, including inflation and the central bank’s interest rate decision.
“Since… late June, inflationary pressures have hurt South African consumers and although hiking rates are not ideal, controlling a weakening rand is essential in limiting further inflation downside on the consumer,” said Warren Venketas, analyst at forex trading firm IG.
Stocks on the Johannesburg Stock Exchange (JSE) were up nominally, mirroring the gains on the Wall Street and global equities.
Overall on the JSE, the All-Share index rose 1.15% to 67,785 points, while the Top-40 index closed 1.22% higher at 61,499 points.
The government’s benchmark 2030 bond was lower, with the yield up 3 basis points at 11.110%.
(Reporting by Anait Miridzhanian in Gdansk and Bhargav Acharya in Bengaluru; Editing by Emelia Sithole-Matarise, Alexandra Hudson)
