Rand trades weaker as the US rate-hike bets boost dollar

The rand opened weaker on Tuesday as the dollar gained in global markets, with traders wary that US inflation data due later in the week could unleash bets on faster interest rate hikes. Photo: AP Photo/Denis Farrell

The rand opened weaker on Tuesday as the dollar gained in global markets, with traders wary that US inflation data due later in the week could unleash bets on faster interest rate hikes. Photo: AP Photo/Denis Farrell

Published Feb 8, 2022

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The rand opened weaker on Tuesday as the dollar gained in global markets, with traders wary that US inflation data due later in the week could unleash bets on faster interest rate hikes.

Stunningly strong US labour data last week has put extra focus on inflation, forecast to hit a four-decade high of 7.3 percent in January in Thursday's data release, in the lead up to March's Federal Reserve meeting.

At 0622 GMT, the rand traded at 15.5550 against the dollar, around 0.5 percent weaker than Monday's close.

The dollar was 0.2 percent stronger against a basket of currencies.

Sentiment was also impacted by state-owned utility Eskom resuming scheduled power cuts on Monday, as it suffered more breakdowns at its ailing coal fleet. Eskom's woes are a major constraint on economic growth and investor sentiment in Africa's most industrialised nation.

The focus will soon shift to President Cyril Ramaphosa's annual State of the Nation Address in parliament on Thursday, a speech he typically uses to announce reforms in key policy areas.

The statistics agency will also release December mining and manufacturing numbers on Thursday.

Elsewhere, the government's benchmark 2030 bond was weaker in early deals, with the yield edging up 2.5 basis points to 9.385 percent.

REUTERS