JOHANNESBURG, April 20 (Reuters) – The South African rand gained on Thursday as the dollar slipped after U.S. weekly jobless claims data fuelled hopes the U.S. Federal Reserve could slow interest rate hikes.
At 1509 GMT, the rand traded at 18.0100 against the U.S. currency , nearly 1% stronger than Wednesday’s close.
The dollar was last tracking 0.19% weaker at 101.8 against a basket of global currencies.
The number of Americans filing new claims for unemployment benefits increased moderately last week, suggesting the labour market was gradually slowing as the Federal Reserve’s year-long interest rate hiking campaign dampens demand.
The dollar weakness comes on the back of a possibility of slowing interest rate hikes by the Fed, Greg Davies, head of wealth at Cratos Capital told Reuters.
Weakness in the greenback has instilled some risk appetite in the markets. Like most emerging market currencies, the risk-sensitive rand often takes cues from global drivers such as U.S. monetary policy, in the absence of major local economic data points.
Speaking on the local currency, Davies said that markets think the South African Reserve Bank would continue to hike interest rates after inflation numbers released on Wednesday were “stubbornly high”.
Shares on the Johannesburg Stock Exchange were marginally higher, with the blue-chip Top-40 index (.JTOPI) closing up 0.06%, and the broader all-share index (.JALSH) ending the day 0.11% higher.
The government’s benchmark 2030 bond was stronger, with the yield down 4.5 basis points at 10.070%.
Reporting by Tannur Anders and Alexander Winning
Editing by Mark Potter, Bhargav Acharya and Angus MacSwan
Our Standards: The Thomson Reuters Trust Principles.
