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S.Africa's rand slides as lengthy Fed easing ruled out, stocks rise
JOHANNESBURG, Aug 1 (Reuters) - South Africa's rand weakened
on Thursday along with other emerging market currencies, a day
after the U.S. central bank cut lending rates but ruled out a
long rate-cutting campaign.
Stocks closed higher.
At 1505 GMT the rand was 1.45% weaker at 14.5475
per dollar, its weakest since June 18.
The U.S. Federal Reserve cut interest rates as expected on
Wednesday but chief Jerome Powell said the move might not be the
start of a lengthy campaign to shore up the economy against
risks, disappointing investors who hoped for a more dovish
The dollar index rose to a two-year high, hurting
demand for developing world currencies.
The tame outlook for U.S. rates adds to economic pressures
faced by the rand at home after unemployment hit an 11-year high
and the fiscal and credit ratings risk posed by power utility
Eskom continued to unnerve investors.
"The rand is likely to remain under sustained pressure, with
local factors also weighing on it. The focus is now likely to
shift to the U.S. NFP data release tomorrow," traders at Nedbank
said in a note.
In equities, the Top-40 index closed 1% higher
while the broader all-share was up 0.5%.
Among the gainers were e-commerce giant Naspers,
which closed up nearly 4%.
Bonds weakened, with the yield on the benchmark 10-year
government issue climbing 5.5 basis points to 8.38%.
(Reporting by Mfuneko Toyana
Editing by Raissa Kasolowsky and Alexandra Hudson)
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