JOHANNESBURG (Reuters) -The South African rand rose on Friday after Federal Reserve Chairman Jerome Powell indicated interest rates would be cut next month.
At 1520 GMT, the rand was trading at 17.71 against the dollar, 1.82% stronger than the previous close.
“The time has come for policy to adapt. The direction we want to go is clear, and the timing and pace of rate cuts will depend on the incoming data, the evolving outlook and the balance of risks,” Powell told the Kansas City Fed’s annual newspaper. economic conference in Jackson Hole, Wyoming.
Like other risk-sensitive currencies, the rand often takes cues from global factors, such as US monetary policy, in addition to important local factors.
The stock fell 0.75% against a basket of currencies after Powell’s comments.
Domestic investors will next week turn their attention to July’s producer inflation, money supply, trade and budget balance figures for clues about the health of the South African economy.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed 0.73% higher.
South Africa’s 2030 government bond was stronger, with yields falling 13.5 basis points to 9.075%.
