Johannesburg — The South African rand strengthened against a weaker dollar early on Friday after U.S. Treasury yields lost some steam and traders turned their attention to a slew of local data points, including trade and budget figures.
At 0634 GMT, the rand traded at 18.8950 against the dollar , about 0.5% stronger than its previous close.
The dollar last traded around 0.2% weaker against a basket of global currencies.
“The rise in U.S. rates has finally run out of steam. Some dovish Fed speak yesterday saw yields ease off 15+ year highs,” said Rand Merchant Bank analysts in a research note.
“Whether this is a change in direction or just a pause remains to be seen. But global markets sigh with relief.”
Like other risk-sensitive currencies, the rand often takes cues from global factors like U.S. monetary policy.
On Friday, local investors will focus on August money supply (ZAM3=ECI) and private sector credit growth (ZACRED=ECI), trade (ZATBAL=ECI) and budget (ZABUDM=ECI) balance figures for fresh direction.
South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 8 basis points to 10.960%.
*Tannur Anders; editing: Sonali Paul – Reuters
