The South African rand pared some losses on Friday, on improved market sentiment during the European session and after a speech by the U.S. Federal Reserve chair that could set the tone for future interest rate hikes in the United States.
At 1528 GMT, the rand traded at 18.6550 against the dollar , about 0.9% stronger than its previous close, after gaining as much as 1% earlier in the day.
The rand has had a turbulent week, contributing to its over 4% losses month-to-date.
On Friday, Fed Chair Jerome Powell gave a speech at the Jackson Hole Symposium for global central bankers, in which he said that further U.S. rate hikes may be needed to reach the country’s inflation objective.
“Given how high U.S. Treasury yields have risen in recent weeks, the risk is that Powell’s comments are interpreted by the market as dovish, even if he tries to maintain a balanced or even slightly cautious tone,” Danny Greeff of ETM Analytics told Reuters ahead of the speech.
“The (rand) will trade at the mercy of Jackson Hole-generated headlines into the weekend,” Greeff said.
South Africa’s benchmark 2030 government bond was weaker, with the yield up 1 basis points at 10.210%.
On the Johannesburg Stock Exchange, the blue-chip Top 40 index (.JTOPI) ended the week in the red, closing about 0.7% down.
Reporting by Tannur Anders; Editing by Sonia Cheema, Devika Syamnath and Jonathan Oatis
