JOHANNESBURG: The South African rand gained in early trade on Friday, extending a recovery from the previous session on growing expectations that the US central bank will stand still on interest rates this month.
At 0645 GMT, the rand traded at 19.5875 against the dollar , around 0.2% stronger than its previous close.
The rand struck a new record low of 19.9075 on Thursday but ended the day stronger as US manufacturing data and comments by Federal Reserve officials reinforced expectations that the Fed would skip a rate hike at its June policy meeting.
The dollar was around 0.1% weaker against a basket of global currencies on Friday. Markets are now pricing in a 20% chance of the Fed hiking by 25 basis points compared to a 50% chance a week earlier, according to the CME FedWatch tool, prompting a move back to riskier currencies.
The rand had a tumultuous May, losing more than 7% against the dollar, as investor sentiment soured badly on US allegations that South Africa supplied weapons to Russia and unrelenting power cuts.
South Africa’s electricity minister Kgosientsho Ramokgopa will from 1200 GMT give an update on efforts to address the crippling power shortage.
South African rand little changed in early trade
Also on Friday, the government will auction inflation-linked bonds and Treasury bills.
South Africa’s benchmark 2030 government bond was little changed in early deals, with the yield down 0.5 basis points to 11.235%.
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