THE rand gained slight traction against a weaker dollar on Thursday morning after softer US data reinforced expectations that the US Federal Reserve will start lowering interest rates in September.
The dollar index fell to around 104.2, hovering at its lowest levels in five weeks as US inflation slowed in April, Trading Economics said. Weaker-than-expected US retail sales figures for April also provided further evidence that the economy was slowing.
The core inflation rate in the US slowed to an annualised 3.6% in April from 3.8% in March, matching market forecasts and posting the lowest reading in three years.
By 11.55am the rand was 0.24% stronger against the dollar.
Bianca Botes, a director at Citadel Global, said, “A moderation in US inflation has ramped up bets that the Fed will move to cut rates later in the year, bolstering risk appetite.”
The rand has made modest gains against the dollar and started the day trading at R18.28 to the dollar, R19.89 to the euro and R23.19 to the pound.
Meanwhile, the JSE index was slightly up to trade at over one-year highs of 79 700 points on Thursday morning, extending gains for the second day, in line with its Asian peers, Trading Economics said.
Locally, South Africa’s President Cyril Ramaphosa on Wednesday signed a controversial National Health Insurance bill into law, just two weeks ahead of a highly-contested general election. The new law aims to provide quality universal health coverage to all South Africans, yet its implementation faces opposition and scepticism due to concerns about it potentially being undermined by widespread corruption and budget restraints.
Among single stocks, Karoo led the gains, with a more than 5% advance, followed by Impala Platinum and Sibanye-Stillwater, up 4.1% and 3.8% respectively. In contrast, Tsogo Sun underperformed, suffered a decline of more than 1.5%.
Gold
Gold climbed near $2 390 (R43 530) per ounce, trading at its highest level in nearly a month, buoyed by a weaker dollar and lower Treasury yields, Trading Economics said.
Oil
Brent crude futures rose above $83 per barrel, extending gains from the previous session as a larger-than-expected decline in weekly US crude inventories supported oil prices. Energy Information Administration data showed that US crude stockpiles fell by 2.508 million barrels last week, declining for the second straight week and exceeding forecasts for a 1.362 million barrel draw, Trading Economics said.
BUSINESS REPORT