JOHANNESBURG (Reuters) -The South African rand strengthened more than 1% against the dollar on Monday, after weaker business activity in the UK, euro zone and United States suggested fewer global rate hikes might be needed.
At 1512 GMT, the rand traded at 17.7575 against the dollar, about 1.2% stronger than its previous close.
The dollar was firm, trading around 0.2% stronger against a basket of global currencies.
Central bank interest rate decisions in major economies are the focus with week, with investors expecting rate hikes from the U.S. Federal Reserve on Wednesday and the European Central Bank on Thursday.
South Africa’s central bank kept rates unchanged last week after 10 consecutive hikes.
“The ZAR enjoyed some tailwinds this afternoon as the market pared bets on an extended global rate-hike cycle after some weak Eurozone and UK PMI data,” said Danny Greeff, co-head of Africa at ETM Analytics.
Rising gold and coal prices provided additional support, he added.
The rand has gained more than 5% since the start of July.
On the Johannesburg Stock Exchange, both the blue-chip Top-40 index and the broader all-share index closed 0.08% lower.
South Africa’s benchmark 2030 government bond was stronger, with the yield down 7.5 basis points to 10.260%.
(Reporting by Tannur Anders and Rachel Savage; Editing by Alexander Winning, Nellie Peyton and Christina Fincher)
