JOHANNESBURG (Reuters) -The South African rand strengthened against a weaker dollar on Friday after U.S. Treasury yields lost some steam, infusing some risk appetite into the markets.
At 1543 GMT, the rand traded at 18.8850 against the dollar, about 0.54% stronger than its previous close.
The dollar last traded around 0.07% weaker against a basket of global currencies.
“The rise in U.S. rates has finally run out of steam. Some dovish Fed speak yesterday saw yields ease off 15+ year highs,” Rand Merchant Bank analysts said in a research note.
“Whether this is a change in direction or just a pause remains to be seen. But global markets sigh with relief.”
Like other risk-sensitive currencies, the rand often takes cues from global factors such as U.S. monetary policy and the direction of the safe-haven dollar.
Locally, data showed South Africa posted a trade surplus of 13.28 billion rand ($703.87 million) and a budget deficit of 47.33 billion rand in August.
Shares on the Johannesburg Stock Exchange fell, with the blue-chip top-40 index closing nearly 0.3% lower.
South Africa’s benchmark 2030 government bond was stronger, with the yield down 23 basis points to 10.810%.
(Reporting by Tannur Anders and Bhargav Acharya; Editing by Sonali Paul and Alison Williams)