JOHANNESBURG (Reuters) -South Africa’s rand continued to give back some of last week’s gains on Tuesday as the U.S. dollar traded higher.
At 1705 GMT, the rand traded at 18.3575 against the dollar, about 0.4% weaker than its previous close.
The dollar was last up more than 0.3% against a basket of major currencies.
The South African currency, susceptible to changes in global factors, rallied last week on hopes the U.S. Federal Reserve has reached the end of its policy tightening cycle following a pause in interest rate hikes.
“Things have taken a drastic turn as if the market interpreted this as the end of interest rate increases,” Casparus Treurnicht, portfolio manager at Gryphon Asset Management, told Reuters.
“Then the Australian central bank hiked their rates with 25 basis points this morning – surprising all those that believed in this newfound optimism,” he added.
Federal Reserve Chairman Jerome Powell is due to speak on Wednesday and Thursday, where the focus will be on whether he maintains the more dovish tone struck after last week’s policy meeting.
Investors will also be closely watching South Africa’s September mining production and manufacturing figures for clues on the health of the local economy.
Both the blue-chip Top 40 index and the benchmark all-share index closed more than 2% lower, led by a drop of over 4% in the resources index.
South Africa’s benchmark 2030 government bond was almost unchanged in late deals, with the yield at 10.400%.