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Rand, stocks lower after U.S. central bank raises interest rates

Story from: TownPress

JOHANNESBURG – South Africa’s rand retreated from a two-and-a-half month high on Thursday after the U.S. central bank raised interest rates said it was prepared to continue tightening monetary policy.

At 0640 GMT, the rand traded 0.52 percent weaker at 12.6775 per dollar compared to close of 12.6125 overnight in New York.

The rand gained more than one percent in the previous session to reach its firmest level since March 27 as surprise expansion in April retail sales helped the currency shrug off a plunge by business confidence to nine-year lows.

The currency, however, gave back gains in offshore trade after the Fed raised lending rates by 25 basis points, denting demand for emerging markets currencies that had seen large flows as the global hunt for yield persisted.

Traders said the rand also suffered some profit selling on the recent rally and that the unit was also approaching technical barriers near 12.40 mark.

South African bonds were also weaker, with the yield on benchmark 2026 government bond up 1 basis points to at 8.415 percent.

Stocks set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.5 percent.


The post Rand, stocks lower after U.S. central bank raises interest rates appeared first on TownPress.

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