January 17, 2022, 17:06

    South African rand strengthens, stocks fall in early trade

    South African rand strengthens, stocks fall in early trade

    JOHANNESBURG, Jan 14 (Reuters) – The South African rand strengthened in early trading on Friday as the dollar stayed on the back foot after investors assumed that an imminent rate hike by the U.S. Federal Reserve is already priced in.

    At 0750 GMT, the rand traded at 15.3545 against the dollar, 0.29% weaker than its previous close.

    After a less hawkish commentary by Federal Reserve Chairman Jerome Powell and U.S. jobless numbers broadly in line with expectations helped to soothe investors' nerves, Fed Governor Lael Brainard signalled on Thursday that rates would rise in March. read more

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    While this should have strengthened the dollar, it continued to trade weaker against a basket of currencies, headed for its largest weekly fall in more than a year, as investors think a rate hike is already priced in.

    However, there is lingering uncertainty around emerging market currencies as more firm signals of an imminent U.S. rate hike could still bolster the greenback.

    "The rand had traded as firm as R15.27 but… was looking overbought in the short term, and a correction was likely.," said Andre Cilliers, Currency Strategist at TreasuryONE in a note on Friday.

    He said he expected a trading range of 15.30 to 15.50 rand for a dollar on Friday.

    South Africa's stock market opened weaker, with most shares across sectors such as banking, financials, mining and industrial trading in the red.

    The benchmark all-share index (.JALSH) was down 0.63% to 75,448 points and the blue-chip index of top 40 companies (.JTOPI) was tending lower by 0.65% to 68,738 points at 0750 GMT.

    Most Asian shares were also trading at a loss after Brainard's statement on a Fed rate hike.

    Register now for FREE unlimited access to Reuters.comRegisterReporting by Promit Mukherjee
    Editing by Gareth Jones

    Sourse: reuters.com

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