JOHANNESBURG (Reuters) -South Africa’s rand extended its gains against a weaker dollar on Friday, fuelled by expectations that the Federal Reserve will cut interest rates later this year.
At 1543 GMT, the rand traded at 18.2250 against the dollar, about 0.2% stronger than its previous close.
“The rand has gained from the weaker dollar after a volatile week of trading,” Andre Cilliers, currency strategist at TreasuryONE, said earlier in the day.
The dollar index was last trading down over 0.2% against a basket of currencies.
Economic data out of the U.S. on Friday showed a slowdown in the job market in June and rising unemployment, adding to hopes of an interest rate cut as early as September which were boosted by softer-than-expected data earlier in the week.
The rand, like most emerging market currencies, takes its cue from global drivers such as U.S. monetary policy, in addition to local events.
“The rand is expected to closely follow the dollar as attention shifts away from government and cabinet news headlines,” Cilliers added.
Ministers in the new South African government were sworn in on Wednesday after a historic election in May in which the African National Congress lost its majority for the first time since the end of apartheid 30 years ago.
On the stock market, the Top-40 index closed 0.35% higher. South Africa’s benchmark 2030 government bond was stronger, as the yield fell 2.5 basis points to 9.76%.
