South African rand gains on weaker dollar, focus on Fed rate path

JOHANNESBURG (Reuters) -The South African rand gained on Wednesday against a weaker dollar, as focus remains on the future interest rate path of the world’s biggest economy.

At 1508 GMT, the rand traded at 18.12 against the dollar, 0.14% stronger than its previous close.

The dollar index last traded around 0.08% weaker against a basket of other major currencies.

U.S. inflation has been improving in recent months and though Federal Reserve Chair Jerome Powell was less dovish than expected in remarks on Tuesday, he said that “more good data would strengthen” the case for central bank interest rate cuts.

Markets will focus on U.S. inflation data on Thursday that could give more hints on the Fed’s future interest rate path.

Local investors will also be looking at monthly mining and manufacturing figures for clues on the health of the South African economy.

The rand often takes cues from global drivers like U.S. monetary policy in addition to major local data points.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed 0.14% weaker.

South Africa’s benchmark 2030 government bond was stronger, as the yield fell 8 basis points to 9.725%.

(Reporting by Tannur Anders and Bhargav AcharyaEditing by Alexandra Hudson and Emelia Sithole-Matarise)


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