Rand takes knock as investors wager on the Fed
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