South African rand stronger as dollar extends drop

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South African rand stronger as dollar extends drop

10:29 CAT | 16 Jan 2023

File photo: Reuters/Thomas White

The South African rand was stronger early on Monday, as the dollar extended last week’s fall after data showed U.S consumer prices fell for the first time in more than 2-1/2 years in December.

At 0617 GMT, the rand ZAR=D3 traded at 16.7950 against the dollar, about 0.3% stronger than its previous close.

The dollar =USD was down about 0.3% against a basket of currencies.

With decades-high inflation in the United States showing signs of cooling, investors are now betting the Federal Reserve may be nearing the end of its interest rate-hike cycle, and that rates will not go as high as previously feared.

No major economic data releases are expected in South Africa on Monday and U.S. markets are closed, which could make for thin trading.

Later this week South African mining output ZAMNG=ECI and retail sales ZARET=ECI for November are due, as well as December consumer inflation ZACPIY=ECI.

The South African government’s benchmark 2030 bond ZAR2030= was slightly weaker in early deals, with the yield up 2 basis points to 9.785%.

Source: Reuters