(Updates to reflect afternoon trade)
JOHANNESBURG, Nov 23 (Reuters) – The South African rand slipped further on Tuesday, trading near a one-year low, as the dollar held firm on bets for U.S. interest rate increases after Federal Reserve Chair Jerome Powell was nominated for a second term.
At 1526 GMT, the rand traded at 15.8875 against the dollar, roughly 0.2% weaker than its previous close.
U.S. President Joe Biden on Monday nominated Powell over another candidate whom markets considered more dovish, reinforcing market expectations of U.S. rate rises next year.
Higher rates in developed countries tend to drain capital away from higher-yielding but riskier emerging markets such as South Africa.
Riskier assets have also been shaken up over recent sessions amid surging COVID-19 cases in Europe and renewed curbs, dousing investor hopes of a quicker recovery in consumption and economic growth worldwide.
A leading South African business cycle indicator dipped in September, data released on Tuesday showed, but it had little impact on the rand.
The government’s benchmark 2030 bond weakened on Tuesday, with the yield up 9 basis points to 9.685%, extending a price fall from a day earlier.
Shares on the Johannesburg Stock Exchange (JSE) rose for a second consecutive day and both major indexes closed at their highest yet as recovery in mining and local financial companies held the momentum.
The JSE bucked a global trend where most major indexes either fell or stayed muted as concerns over Powell’s nomination stoked concerns of higher interest rate, which would make the cost of capital dearer.
The blue-chip index of top 40 companies ended up 0.28% to 64,566 points while the benchmark all-share index was at 71,015 points.
The resources index, which represents a basket of gold and platinum companies, gained over 1.5%. (Reporting by Olivia Kumwenda-Mtambo, Alexander Winning, Promit Mukherjee and Ed Osmond)