South African rand gains against weaker dollar after Fed signals pause

FILE PHOTO: South African Rand coins are seen in this illustration picture taken October 28, 2020. REUTERS/Mike Hutchings/Illustration

JOHANNESBURG (Reuters) – The South African rand firmed in early trade on Thursday, as the U.S. dollar fell against most major currencies following comments from the Federal Reserve that suggested it may stop hiking rates.

At 0625 GMT, the rand traded at 18.2500 against the dollar, about 0.2% stronger than its previous close.

The dollar was down about 0.15% against six rivals.

The Fed on Wednesday raised its benchmark interest rate by 25 basis points, as expected, but also watered down the language in its policy statement about the need for further rate hikes.

Local investors will be looking to South Africa’s S&P Global purchasing managers’ index survey due on Thursday to gauge the health of the economy.

South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 5.5 basis points at 10.070%.

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