South Africa's rand fell to its weakest in more than two months on Wednesday as the dollar rose on revived expectations of an early Federal Reserve rate hike after data suggested the U.S. economy is regaining momentum.
Rand falls on revived U.S. rate hike expectations
At 0728 GMT, the rand traded at 15.7700 versus the dollar, 1.4 percent weaker from Tuesday's New York close.
At 0728 GMT, the rand traded at 15.7700 versus the dollar, 1.4 percent weaker from Tuesday's New York close. The currency was trading at its weakest levels since March 16, according to Thomson Reuters data.
"Dollar gains rather than domestic politics are the driver," Rand Merchant Bank analyst John Cairns said in a note.
"The Fed remains very much in focus today. The minutes from the last Fed meeting, to be released tonight, should give us an indication of how strongly voting members believe in their own forecast of two rate hikes this year."
The rand has been under pressure since Monday, weighed down by domestic political uncertainty after a news report that Finance Minister Pravin Gordhan faced arrest. The report was denied by the presidency, police and prosecutors.
Gordhan is being investigated by police over the creation of a covert surveillance unit in the revenue services during his time as head of the agency.
Gordhan said on Tuesday reports of his imminent arrest amounted to an attack on the Treasury.
The finance minister was due in parliament on Wednesday, his first public appearance since the arrest reports were published.
Locally, focus was on April consumer price inflation at 0800 GMT, March retail sales numbers due later in the day, as well as an interest rate decision on Thursday.
Economists expect the repo rate to be left unchanged due to slower inflation.
On the bourse, the Top-40 index and the broader all-share were flat in early trade.
Government bonds weakened, with the yield for the 2026 benchmark adding 10 basis points to 9.485 percent.
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