JOHANNESBURG: South Africa’s rand strengthened against a weaker dollar on Wednesday, as traders braced for US inflation data and its implications for further Federal Reserve rate hikes.
At 0655 GMT, the rand traded at 18.1500 against the dollar, 0.26% firmer than its previous close.
The US dollar index, which measures the greenback against a basket of six major peers, dropped around 0.2% to 113.14, after earlier touching the highest since Sept. 29 at 113.59.
“The rand remains vulnerable over the near term, notwithstanding how much risk is already priced in at current levels,” economists at ETM Analytics wrote in a note.
South African rand weakens against strong US dollar
ETM Analytics economists said volatility will likely remain the order of the day until there are more signs of a potential Fed pivot, improving economic conditions in China or de-escalation of Russia’s war in Ukraine.
The government’s benchmark 2030 bond was little changed in early deals, with the yield at 10.735%.
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