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Rand gains as dollar falls on weak US data

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The rand gained on Tuesday, as the dollar hit a three-week low on weak U.S. economic data, raising hopes that the Federal Reserve will slow its aggressive pace of interest rate hikes.

At 21:43, the rand traded at 18.20 against the U.S. dollar, 1.16% stronger than its previous close.

The dollar index, which measures the currency against six rivals, was last trading down 0.98% to 110.88.

Data showed that U.S. home prices sank in August as surging mortgage rates sapped demand, sending the safe-haven dollar into negative territory.

Emerging market currencies such as the rand are highly susceptible to global drivers such as the U.S. monetary policy.

On Wednesday, local investors will turn their attention towards South African government’s mid-term budget.

Follow Moneyweb’s MTBPS coverage here.

A Reuters poll published last week predicted the National Treasury would be able to trim this year’s projected budget deficit thanks to buoyant mining receipts.

Shares on the Johannesburg Stock Exchange rose, mirroring similar moves in global equities as they were buoyed by hopes that the Fed would slow the pace of rate hikes.

Overall on the stock exchange, the Top-40 index closed 1.38% higher, while the broader all-share index ended up 1.35%.

The government’s benchmark 2030 bond was slightly up, with the yield down 1 basis point to 10.860%.

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