RAND UP ON WEAKER DOLLAR

THE RAND strengthened yesterday as the dollar deepened losses after a smaller-than-expected rise in US producer prices provided further evidence that inflation may be cooling.

At 6.11pm, the rand traded at R17.24 against the dollar, 0.36% stronger than its closing level on Monday.

The dollar index, which tracks the US currency against a basket of others, was down more than 0.6%.

The US producer price index rose 8.0% for the 12 months through October compared with economist expectations for an 8.3% increase and September’s 8.4% rise, according to Labour Department data.

On the JSE, the Top40 index closed 0.36% higher on 66 524.92 points, mirroring global markets. The all share index gained 0.24 percent to 72 998.69 points.

The government’s benchmark 2030 bond was slightly stronger in afternoon deals, with the yield down 1 basis points at 10.245%.

Meanwhile, gold prices stalled after bouncing to their highest in three months yesterday on the dollar’s retreat, as softer US inflation readings bolstered bets that the Federal Reserve (Fed) may slow rate hikes.

Spot gold was steady at $1 772.19 (about R30 636) an ounce by 5.23pm after hitting its highest since August 15 earlier. US gold futures fell 0.1% to $1 775.40 an ounce.

“Inflation expectations continue to come down... (hence) the Fed is less likely to raise interest rates faster,” said David Meger, director of metals trading at High Ridge Futures.

As a result, yields have fallen and the dollar has been under sever pressure, helping drive gold’s upturn, Meger added.

Among other precious metals, spot silver fell 1.1% to $21.73 an ounce after retreating from its highest since early June. Platinum advanced 0.3% to $1 020.63, and palladium jumped 2.4% to $2 074.11. I Reuters