JOHANNESBURG, Aug 29 (Reuters) – The South African rand firmed on Thursday to its strongest level in 13 months, buoyed by the return of risk appetite to financial markets ahead of key U.S. inflation data which could solidify rate cut bets in the world’s biggest economy.
At 1546 GMT the rand traded at 17.7675 against the dollar , about 0.38% stronger than its previous close. It hit 17.6775 to the greenback earlier in the day, its best performance since late July 2023.
Globally, markets will look to key U.S. Personal Consumption Expenditures (PCE) price index on Friday, the Federal Reserve’s preferred measure of inflation. If the inflation report is positive, it is another argument in favour of cutting interest rates in September.
Like other emerging market currencies, the rand often takes cues from global drivers in addition to local factors.
Local investors will now shift focus to July money supply, trade and budget balance data on Friday.
South Africa’s benchmark 2030 government bond was slightly stronger, as the yield slipped 0.5 basis point to 9.135%.
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Reporting by Bhargav Acharya and Tannur Anders
Editing by David Goodman, William Maclean
Our Standards: The Thomson Reuters Trust Principles.
