South Africa’s rand retreats, stocks set to open lower

JOHANNESBURG (Reuters) – South Africa’s rand weakened against the dollar early on Thursday, giving up some of the gains made in the previous session, as the greenback received support from expectations the U.S. Federal Reserve will raise rates several more times this year.

The rand however stayed below the psychological level of 12 rand per dollar breached last week on expectations of economic and political reforms.

At 0643 GMT, the rand traded at 11.8975 per dollar, 0.4 percent weaker than its New York close on Wednesday.

The dollar was supported after the Fed signalled its confidence about inflation and growth in the world’s biggest economy, bolstering expectations borrowing costs will continue to climb under incoming central bank chief Jerome Powell. [FRX/]

Higher U.S. rates often drain capital away from higher-yielding, but riskier emerging markets, weighing on their currencies.

Stocks were set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.2 percent.

(Reporting by Olivia Kumwenda-Mtambo; Editing by Christian Schmollinger)

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