South African rand gains as risk sentiment improves

JOHANNESBURG (Reuters) -The South African rand strengthened on Monday, as risk sentiment improved on bets that an interest rate cut by the U.S. Federal Reserve is close.

At 1504 GMT, the rand traded at 18.0750 against the dollar, 0.56% stronger than its previous close.

The dollar last traded about 0.04% weaker against a basket of global currencies.

Economic data out of the U.S. on Friday showed a slowdown in the job market in June and rising unemployment, adding to hopes of an interest rate cut as early as September which were boosted by softer-than-expected data earlier last week.

“Bets on a possible September rate cut have climbed, lifting risk sentiment in markets,” said Andre Cilliers, currency strategist at TreasuryONE.

With few major local economic releases due this week, the risk-sensitive rand is likely to take cues from the direction of the dollar and fresh U.S. economic data.

On the stock market, the Top-40 index was little changed.

South Africa’s benchmark 2030 government bond was marginally stronger, as the yield was down 1 basis point to 9.75%.

(Reporting by Tannur Anders and Bhargav Acharya; Editing by Sharon Singleton and Andrea Ricci)


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