JOHANNESBURG (Reuters) -The South African rand jumped on Friday, after comments by Federal Reserve Chair Jerome Powell signalled an interest rate cut next month.
At 1520 GMT, the rand traded at 17.71 against the dollar, 1.82% stronger than its previous close.
“The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” Powell said to the Kansas City Fed’s annual economic conference in Jackson Hole, Wyoming.
Like other risk-sensitive currencies, the rand often takes cues from global drivers such as U.S. monetary policy in addition to major local factors.
The dollar index slumped 0.75% against a basket of currencies following Powell’s remarks.
Domestic investors will next week shift their focus towards July producer inflation, money supply, trade and budget balance figures for clues on the health of South Africa’s economy.
On the Johannesburg Stock exchange, the blue-chip Top-40 index closed up 0.73%.
South Africa’s benchmark 2030 government bond was stronger, with the yield down 13.5 basis points to 9.075%.
This post is originally published on INVESTING.
