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South Africa’s rand retreated on Friday, losing gains made after U.S. data offered hope inflation was now on a sustained downward trend, potentially allowing the Federal Reserve to slow its policy tightening pace.
At 1525 GMT, the rand traded at 16.8300 against the dollar, 0.6% weaker than its previous close.
The dollar index , which measures the currency against six rivals, was last up 0.05% at 102.23, aided by fading risk appetite and mixed U.S. company earnings.
Locally, investors are grappling with the prospect of prolonged periods without electricity for South Africans as the country is currently struggling with recurring power cuts of about six to eight hours a day for most households.
The country’s energy regulator on Thursday approved an 18.65% power price rise for beleaguered state utility Eskom for the financial year starting on April 1.
“Looking forward, SA (South Africa) will see upwards pressure coming from the larger than expected 18.65% increase in electricity prices announced late yesterday by NERSA,” Investec analyst Annabel Bishop said in a research note.
Shares on the Johannesburg Stock Exchange ended higher, mirroring similar moves in global equities as hopes of inflation easing took hold. Overall, the broader all-share index ended 0.9% higher, while the top-40 index closed up 0.98%.
The government’s benchmark 2030 bond was stronger, with the yield down 6 basis points to 9.765%.
Source Reuters