South African rand weakens against the dollar ahead of CPI

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The South African rand and stocks fell on Tuesday as the dollar rose in anticipation of this week’s closely watched US inflation data.

The rand/dollar exchange rate was 18.6400 at 1640 GMT, down 1.7% from the previous market close.

The dollar’s value increased by about 0.27 percent in comparison to a basket of major currencies.

As there were no major economic data releases from South Africa on Tuesday, the rand took its cues from global drivers.

Following Federal Reserve Chair Jerome Powell’s comments last week that policy decisions will be “driven by incoming data,” implying a pause in the rate-hiking cycle, investors’ focus has shifted to Wednesday’s consumer inflation report in the United States.

The rand has underperformed against other emerging market currencies this year as a result of the country’s “greylisting” by the Financial Action Task Force and the continuation of a power crisis.

So far this year, it has lost more than 7% of its value against the US dollar.

The broader all-share index and the blue-chip index of the top 40 companies both fell 1%.

The benchmark 2030 South African government bond was weaker, with a 3 basis point increase in yield to 10.360%.

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