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South African rand rallies on lower-than-expected US inflation
The South African rand rallied on Thursday afternoon, as the dollar dropped sharply on lower-than-expected US inflation data that could allow the Federal Reserve to dial back its hefty interest-rate hikes.
Source: Reuters.
At 1517 GMT, the rand traded at 17.4525 against the dollar, up about 1.8% on its previous close.
The dollar index, which tracks the US currency against a basket of others, was down more than 1.6%.
US consumer prices were up 7.7% year on year in October, marking the first time since February that the annual increase was below 8%.
Among domestic drivers for the rand, South African manufacturing data for September surprised to the upside, rising 2.9% year-on-year versus analysts' predictions for a 2.35% fall.
"The recovery in manufacturing in the third quarter was encouraging and points to the sector making a positive contribution to aggregate GDP following the negative contribution in the second quarter," Nedbank economists said in a research note.
The Johannesburg Stock Exchange's All-share index closed 1.5% higher, helped by optimism over the US inflation numbers.
The yield on the South African government's benchmark 2030 bond fell 22 basis points to 10.28%, reflecting a stronger price.
Source: Reuters
Reuters, the news and media division of Thomson Reuters, is the world's largest multimedia news provider, reaching billions of people worldwide every day.
Go to: https://www.reuters.com/
