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Africa, Forex

South African rand dips as dollar gains on Powell renomination

(Updates to reflect afternoon trade)

JOHANNESBURG, Nov 22 (Reuters) – South Africa’s rand dipped on Monday, as the U.S. dollar rose on Federal Reserve Chair Jerome Powell’s nomination for another term.

At 1603 GMT, the rand traded at 15.7575 against the dollar, roughly 0.1% weaker than its previous close.

In the absence of local drivers, the rand takes its cue from global factors, with the outlook for U.S. monetary policy a major theme.

Some analysts said Powell staying on as Fed chair would mean greater scope for U.S. interest rate hikes.

The South African Reserve Bank (SARB) raised its main lending rate last week for the first time in three years, but that has done little to buttress the rand, with some traders instead focusing on the fact the SARB appears to favour a gradual tightening path.

Domestic data releases this week include a leading business cycle indicator on Tuesday and the producer price index on Thursday.

Johannesburg-listed stocks posted modest gains on Monday, with the All-share index closing up 0.7% at 70,866 points. The government’s benchmark 2030 bond weakened, with the yield rising 11.5 basis points to 9.595%. (Reporting by Alexander Winning and Olivia Kumwenda-Mtambo Editing by Mark Potter)

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