South Africa’s rand weakened against the dollar on Tuesday, as investors looked for clarity on the outlook of the Federal Reserve’s rate-hike path.At 1601 GMT, the rand traded at 17.0475 against the dollar, 0.62% weaker than its previous close.The dollar index , which measures the greenback against six rivals, was last up 0.16% at 103.30.
Like most emerging market currencies, the rand is often influenced by global drivers such as U.S. monetary policy.Markets will look towards U.S. inflation data due on Thursday for cues on the likely path of rates this year after Federal Reserve Chairman Jerome Powell avoided speaking about rate hikes at a conference on Tuesday.”U.S. inflation is expected to drop sharply, which could hold implications for U.S. monetary policy,” ETM Analytics said in a research note.”A larger-than-expected drop might quickly soften expectations for further hikes and detract from the dollar,” ETM added.
Shares on the Johannesburg Stock Exchange fell, mirroring similar moves in global equities as comments from two Fed officials injected a note of caution over the U.S. rate outlook.The government’s benchmark 2030 bond was weaker, with the yield up 2 basis points to 9.870%.
Mseveni