JOHANNESBURG (Reuters) -South Africa’s rand gained on Thursday after data showed U.S. economic growth slowed in the fourth quarter, while the South African Reserve Bank cut its main lending rate for the third time in a row.
At 1801 GMT, the rand traded at 18.4525 against the U.S. dollar, about 0.7% stronger than its previous close. The dollar last traded about 0.1% weaker against a basket of currencies.
The world’s biggest economy recorded softer than expected economic growth for the fourth quarter, which supported the rand’s momentum, analysts said.
Domestic-focussed investors looked to South Africa’s central bank on Thursday, which cut its main lending rate by 25 basis points to 7.50%, as expected.
The central bank placed emphasis on the uncertain global backdrop and said it had modelled the potential impact of a trade war.
Also on Thursday, Statistics South Africa data showed producer inflation was at 0.7% year-on-year in December. The country recorded a budget surplus of 21.38 billion rand in December, National Treasury data showed.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed about 0.4% up.
South Africa’s benchmark 2030 government bond was slightly weaker, with the yield at 9.01%.
(Reporting by Sfundo Parakozov and Tannur Anders; Editing by Bhargav Acharya, Kate Mayberry and Alex Richardson)
