South African rand strengthens as dollar struggles, stocks rise

youpdate rand, add stocks

JOHANNESBURG, February 1 (Reuters)The South African rand strengthened on Tuesday, holding onto gains made in the previous session after the dollar fell as investors consolidated the greenback’s recent gains.

At 3:50 p.m. GMT, the rand ZAR=D3 was trading at 15.3200 against the dollar, 0.49% stronger than its previous close.

The rand is rallying after last week’s losses as bets on U.S. interest rate hikes rose on a hawkish shift by the Federal Reserve at a time when forecasts by the Reserve Bank South- were considered less hawkish than market expectations.

On Tuesday, the dollar fell for a second straight session, with the greenback index trading at 96.397, down 0.29% against a basket of currencies. The weaker dollar came as Fed policymakers allayed investor fears of a very rapid tightening of monetary policy, while an impending hike in US interest rates in March is already priced in.

But investors attributed the dollar’s loss mainly to a near-unprecedented rally until Jan. 28, when the currency hit a 19-month high.

“We think last week’s rally was a bit too extended and the rubber band must have pulled back a bit,” said André Cilliers, currency strategist at TreasuryONE, in an morning note.

But strength in emerging market currencies, including the rand, will not extend too far as investors keep a close eye on the US nonfarm payrolls figure to be released on Friday, he said. he declares.

Stocks on the local stock exchange continued to rise for a second straight session, starting the second month of the year on a strong note after January’s volatility.

A series of promising trade statements from some South African companies and improving near-term prospects for the local economy kept the market momentum going.

The benchmark all-equity index .JALSH rose 0.79% to 74,889 points and the premier index of the top 40 companies .JTOPI ended up 0.82% at 68,375 points.

South African government bonds also firmed, with the benchmark 2030 maturity yield ZAR2030= down 5 basis points to 9.285%.

(Reporting by Olivia Kumwenda-Mtambo and Promit Mukherjee; Editing by Subhranshu Sahu and Angus MacSwan)

((Olivia.Kumwenda@thomsonreuters.com; +27 10 346 1084;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

About Rodney Fletcher

Check Also

Dollar Traps US Businesses in $4 Trillion Stress Test

US one dollar banknotes are seen in front of the stock market graph displayed in …