S.African rand slips as dollar on track for 3rd straight monthly gain

(Reuters) -South Africa’s rand weakened on Wednesday as the dollar headed for its third monthly advance after the Federal Reserve indicated that U.S. interest rates would stay higher for longer.

At 1642 GMT, the rand traded at 17.0850 against the dollar, 0.56% weaker than its previous close.

The dollar index, which measures the greenback against a basket of six major currencies, was at 108.58, below a two-decade peak of 109.48 it hit on Monday. [nL1N3070Y2]

Fed officials on Tuesday reiterated their support for further rate hikes to quell inflation, with New York Fed chief John Williams telling the Wall Street Journal that it will “take some time” before interest rates would be cut.

Stocks on the Johannesburg Stock Exchange (JSE) closed lower, mirroring investor jitters in global equities as hawkish central banks kept them on their toes.

Overall on the JSE, the Top-40 index dropped 0.96%, while the broader all-share index closed down 0.95%.

On the local front, data from the South African Revenue Service showed that the July trade surplus widened marginally to 24.76 billion rand ($1.45 billion), up from a surplus of 24.23 billion rand in June.

The government’s benchmark 2030 bond was weaker in early deals, with the yield up 11 basis points to 10.440%.

($1 = 17.0461 rand)

(Reporting by Anait Miridzhanian in Gdansk and Bhargav Acharya in Bengaluru; Editing by Jan Harvey and Bernadette Baum)


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