Rand takes knock as in­vestors wager on the Fed

Weekend Argus (Saturday Edition) - - LIFE -

THE rand weak­ened yes­ter­day against the dol­lar which gained as in­vestors bet on higher US in­ter­est rates this year af­ter strong eco­nomic data.

Stocks ended slightly higher, ex­tend­ing their win­ning streak to the sixth straight ses­sion but gains were capped by global se­cu­rity con­cerns fol­low­ing the at­tack in France.

At 1520 GMT, the rand traded at 14.3400 per dol­lar, 0.77 per­cent weaker from its New York close on Thurs­day.

“It’s mainly a func­tion of quite strong data out of the US this af­ter­noon, the dol­lar has strength­ened as a re­sult,” ETM An­a­lyt­ics mar­ket an­a­lyst Jana van Deven­ter said.

Im­prov­ing US eco­nomic data has re­vived ex­pec­ta­tions that the Fed­eral Re­serve may raise in­ter­est rates this year.

Data yes­ter­day showed that US con­sumer prices gained for a fourth straight month in June, while re­tail sales also rose more than ex­pected.

Higher US in­ter­est rate ex­pec­ta­tions sub­due in­vestors’ ap­petite for emerg­ing mar­kets as­sets, which of­fer higher re­turns but carry more risk.

Gov­ern­ment bonds also weak­ened, and the yield for the bench­mark in­stru­ment due in 2026 added 5.5 ba­sis points to 8.73 per­cent. – Reuters

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