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Africa, Forex

S.African rand firms in volatile trade, stocks fall

(Updates prices)

JOHANNESBURG, Jan 14 (Reuters) – The South African rand strengthened on Friday, but lost some of its early gains as the dollar regained some ground.

Investor sentiment and trading moves have been see-sawing since the beginning of the year amid uncertainty about the size of likely U.S. monetary tightening and the exact timing of it.

After less hawkish commentary from Federal Reserve Chairman Jerome Powell and U.S. jobless numbers broadly in line with expectations had pressured the dollar, Fed Governor Lael Brainard signalled on Thursday that rates would rise in March, helping the U.S. currency back higher.

At 1540 GMT, the rand traded at 15.3579 against the dollar, up 0.27% from its previous close, but in volatile trade.

The dollar was on track to snap a three-day losing streak against a basket of currencies on Friday.

“The South African rand has flourished against the U.S. dollar since late November 2021 but this may be coming to an end with the Federal Reserve adding to its already hawkish narrative – favouring a ‘buy the dip’ approach,” Warren Venketas, analyst at DailyFX, said in a note.

He said the rand rally may be ending as the weak South African economic and political backdrop takes its toll.

South Africa’s stock market ended weaker, following global markets, with banking, financials, mining and industrials losing much of their gains of the last few days.

The benchmark all-share index was down 1.01% to 75,160 points and the blue-chip index of top 40 companies ended 1.07% lower at 68,448 points.

But the indexes were still almost 1.6% higher on the week, thanks to a strong mid-week run in tech, commodity and banking stocks.

The price of the government’s benchmark 2030 bond rose on Friday, with the yield falling 0.5 basis points to 9.365%. (Reporting by Promit Mukherjee Editing by Gareth Jones and Mark Potter)

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