JOHANNESBURG: South Africa’s rand weakened in early trade on Friday, as the dollar gained on bets the Federal Reserve might keep at its interest-rate hikes for longer after strong economic data in the United States.
At 0644 GMT, the rand traded at 18.2350 against the dollar, 0.3% stronger than its previous close.
The dollar index, which measures the currency against six rivals, was last up 0.13% at 103.93 after data on Thursday showed US weekly jobless claims unexpectedly fell and monthly producer prices increased by the most in seven months in January.
South African rand flat with market focus on US inflation report
“What looked like an unwavering pivot in global monetary policy is no longer as clear. Stronger-than-expected inflation out of the US and renewed global supply pressures… suggest that the global pivot may be pushed out a few months,” ETM Analytics said in a research note.
The risk-sensitive rand often turns towards global drivers such as the US monetary policy in the absence of major local economic data points. Local investors will be walking a tight rope ahead of next week’s budget announcement by South Africa’s finance minister.
The South African government’s benchmark 2030 bond was a tad weaker in early deals, with the yield up 1.5 basis points to 10.040%.
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