Rand strengthens as dollar slides and stocks jump – SABC News

The South African rand strengthened against a falling dollar on Friday as investors began to cut bets on central banks’ ability to raise interest rates this cycle to contain inflation.

Global financial markets have been rocked this month by fears that rapid rate hikes by major central banks could trigger a recession. However, lower commodity prices eased some inflation concerns on Friday, pushing global stocks higher. Read more

At 4:25 p.m. GMT, the rand was trading at 15.8075 against the dollar, 0.97% higher than its previous close.

The dollar index, which measures the US currency against six rivals, fell 0.18% to 104.21, and was on track for its first weekly decline this month as traders cut betting on where interest rates might peak. Read more

Analysts, however, warned of a more hawkish South African Reserve Bank (SARB) in the near term, expecting it to raise inflation rates.

“While the ZAR has held up well so far, the SARB is likely to deem more decisive policy action necessary to raise policy rates to pre-COVID levels as soon as possible in light of an increasingly complex environment. and uncertain for risky assets,” said Jeff Schultz, senior economist at BNP Paribas South Africa, in a note.

Shares on the Johannesburg Stock Exchange (JSE) rose, reflecting gains in global equity markets, with the All-Share Index (.JALSH) rising 1.61% to 66,349 points, and the Top-40 Index ( .JTOPI) closing up 1.65% at 59,993 points.

The government’s benchmark 2030 bond fell, with the yield up 16.5 basis points to 10.260%.

Garland K. Long