Rand strengthens as dollar loses ground on subdued US inflation
Rand gains on weaker dollar as lower inflation trend in the US raises questions about Fed's hawkish stance
The rand gained further ground against the dollar on Thursday afternoon on upbeat local manufacturing data and subdued consumer inflation numbers for September out of the US. The rand gains are linked to improved economic prospects under new finance minister Tito Mboweni and a possible pause by the US Federal Reserve in hiking rates further after the International Monetary Fund (IMF) downgraded expected global GDP growth for 2018 and 2019.
US inflation rose 2.3% in September from 2.7% in August and 2.9% in July. A second month of falling inflation will strengthen market concerns that the Fed is set to continue with interest-rate hikes in an environment of low inflation, which could ultimately affect economic growth negatively. Core inflation in the US, the Fed's preferred measure of price pressures in the economy, was unchanged at 2.2%. The euro gained on the dollar after the release of the data, hitting $1.1592 from $1.1517. Locally, manufacturing production data came in slig...
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