South African Currency Stronger against weaker dollar

Jo’burg, (Reuters) – On Friday, risk appetite was restored to the markets, helping the South African rand gain ground against a declining U.S. dollar.

The rand strengthened by 0.54% against the dollar at 15:43 GMT, when it was trading at 18.8850.

At its most recent exchange rate against a group of major currencies, the US dollar was down by about 0.07%.

U.S. interest rate hikes have lost their momentum. “Yields eased off 15+ year highs yesterday after some dovish Fed speak,” Rand Merchant Bank analysts wrote.

It’s unclear whether this represents a new course of action or merely a temporary hiatus. However, the markets around the world are relieved.

The rand, like other risky currencies, often follows the lead of the safe-haven dollar and U.S. monetary policy.

According to national statistics, South Africa had a trade surplus of R13.28 bn ($703.82 mn) and a budget deficit of R47.33 bn in August.

The blue-chip top-40 index (.JTOPI) on the Johannesburg Stock Exchange ended the day down nearly 0.3%.

The yield on the benchmark South African 2030 government bond fell 23 basis points, reaching 10.810%.