JOHANNESBURG (Reuters) -South Africa’s rand strengthened against a weakened dollar on Wednesday as investors awaited the U.S. Federal Reserve’s interest rate decision, which could signal the end of its tightening cycle.
At 1559 GMT, the rand traded at 17.1775 against the U.S. dollar, 1.22% stronger than its previous close.
The dollar index, which measures the currency against six rivals, was down around 0.4% at 101.68.
The Fed is expected to raise its target interest rate by 25 basis points, setting aside the rapid hikes used last year to curb a surge in inflation in favour of a more stepwise hunt for a stopping point.
South Africa’s new vehicle sales rose 4.8% year-on-year in January, data showed on Wednesday, while separately the Absa Purchasing Managers’ Index (PMI) remained in positive territory thanks to growth in business activity and inventories.
On the Johannesburg Stock Exchange, the Top-40 and the broader all-share indexes closed around 0.4% higher.
Among notable gainers, Bid Corporation jumped 6.57% after the food service firm said it expected its half year profit to rise as much as 49%.
Harmony Gold closed 2.76% higher after the miner said improved metal grades at its underground mines during the second quarter helped it meet production targets and offset the impact of ongoing power cuts in South Africa and global supply chain disruptions.
The government’s benchmark 2030 bond was stronger in afternoon deals, with the yield down 7 basis points to 9.605%.
(Reporting by Nellie Peyton, Nqobile Dludla and Anait Miridzhanian; Editing by Savio D’Souza and Jonathan Oatis)
