South Africa's rand up

South Africa's rand firmed on Wednesday as the dollar weakened after US Federal Reserve Chairman Jerome Powell highlighted risks to the US economy in remarks that could bolster expectations of an interest rate cut later this month. The rand was also boosted by news that President Cyril Ramaphosa has re-appointed South African Reserve Bank Governor Lesetja Kganyago for another five-year term.
At 1530 GMT the rand was 0.95% firmer at 14.0525 per dollar. In prepared remarks to a congressional committee, Powell said concerns about trade policy and a weak global economy "continue to weigh on the US economic outlook" and the Fed stood ready to "act as appropriate" to sustain a decade-long expansion.
"Federal Reserve Chairman Jerome Powell's testimony to the US Congress is surprisingly more dovish than markets were expecting, given the US jobs data," Bianca Botes, Treasury partner at Peregrine Treasury Solutions, said in a note.
"The local unit is now likely to retest the R14.00 mark as the dollar comes under renewed pressure."
Emerging markets have enjoyed capital inflows this year on signs major central banks will embrace a looser monetary policy as a result of trade disputes and growth concerns.
On the bourse, the benchmark Johannesburg Stock Exchange Top-40 Index was up 1.15% to 51,491.95 points while the broader All-Share Index closed 1.11% higher at 57,597.87 points. In fixed income, the yield on the benchmark 2026 government issue fell by 0.5 basis points to 8.11%.