JOHANNESBURG (Reuters) -The South African rand was stronger on Monday against a weaker dollar, as market confidence gained on bets of U.S. interest rate cuts this year, analysts said.
At 1518 GMT, the rand traded at 18.4325 against the dollar, about 0.3% stronger than its previous close.
The dollar was down about 0.1% against a basket of global currencies.
The rand has gained on hopes of an earlier U.S. interest rate cut, Annabel Bishop, chief economist at Investec, wrote in a research note, helped by weaker than expected U.S. jobs data on Friday and dollar weakness.
“Market expectations for a U.S. November interest rate cut increased, as have those for a September cut, although for September the probability is still under a 100% certainty, but has risen materially to close to 100%, driving some minor risk on,” she added.
This week, markets will keep a close eye on a host of speeches by Federal Reserve officials for hints on the future interest rate path of the U.S.
The rand often takes cues from global drivers as well as local data points.
South African private sector activity rose marginally in April as an improvement in business confidence encouraged companies to expand purchasing activity and staffing levels, the S&P Global South Africa Purchasing Managers’ Index (PMI) showed on Monday.
On the stock market, both the Top-40 and the broader all-share indexes closed around 0.5% stronger.
South Africa’s benchmark 2030 government bond was stronger, with the yield down 1.5 basis points to 10.56%.
(Reporting by Tannur AndersEditing by Bernadette Baum and Andrew Heavens)
