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Africa, Forex

South African rand gains as dollar falls on U.S. inflation data

(Updates to reflect afternoon trade)

JOHANNESBURG, Jan 12 (Reuters) – The South African rand advanced on Wednesday as the dollar fell against other currencies, following U.S. inflation data which was in line with economists’ expectations.

At 1535 GMT, the rand traded at 15.3700 against the dollar, around 0.9% stronger than its previous close.

The dollar was down about 0.4% against a basket of currencies, with some analysts attributing its fall to traders having bet on an even quicker rise in U.S. consumer prices than the 7.0% year-on-year reading in December.

The rand added to gains made a day earlier on comments by Federal Reserve Chair Jerome Powell that allayed market fears of a sudden withdrawal of U.S. monetary support that had weighed on riskier assets.

The rand, which is highly sensitive to shifts in sentiment on global markets, has tended to track overseas drivers in recent sessions, with relatively few domestic economic data releases or speeches by local policymakers.

Shares on the Johannesburg Stock Exchange (JSE) rose sharply on Wednesday as Powell’s less hawkish remarks calmed investors nerves and as U.S. inflation data did not spring an unpleasant surprise.

Mirroring global markets, the main indexes on JSE posted their biggest gain since the beginning of the year aided by a jump in consumer internet company Naspers Ltd and petrochemicals major Sasol Ltd.

The benchmark all-share and the top-40 blue-chip indexes both closed at record highs. The former gained 2.59% to 75,885 points, while the latter ended 2.83% higher at 69,207 points.

Index heavyweight Naspers, which surged like most technology companies, closed the day up 9.3% and petrochemical major Sasol clocked an almost 7% gain.

The government’s benchmark 2030 bond also rose, with the yield falling 15 basis points to 9.38%. (Reporting by Promit Mukherjee and Alexander Winning; Editing by Hugh Lawson)

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