JOHANNESBURG (Reuters) -The South African rand gained modestly on Wednesday as the dollar fell globally on data showing cooler-than-expected U.S. headline inflation in March.
Johannesburg-listed stocks closed slightly lower.
U.S. consumer prices rose 0.1% in March, compared to expectations for a 0.2% increase and a 0.4% rise in February.
Despite the smaller-than-predicted increase, economists said underlying inflation pressures mean the Federal Reserve will probably still raise interest rates again next month.
At 1550 GMT, the rand traded at 18.3750 against the dollar, about 0.1% stronger than its previous close.
The dollar was down around 0.5% against a basket of global currencies.
The risk-sensitive rand is highly sensitive to shifts in the outlook for U.S. inflation and monetary policy.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed down 0.4% and the broader All-share index ended the day 0.3% lower, with the bulk of the losses coming before the U.S. inflation figures were released.
Global stock markets were boosted by the U.S. inflation figures, and South Africa-based traders said they should support local equities also.
“I think JSE market investors would be relieved the efforts by the Federal Reserve to tame inflation seem to be working,” said Greg Davies, head of wealth at Cratos Capital.
South Africa’s benchmark 2030 government bond traded stronger, the yield down 3.5 basis points at 9.905%.
(Reporting by Tannur Anders and Anait Miridzhanian;Editing by Alexander Winning)
