Rand slave to US rate hike expectations

Johannesburg - The rand hovered near the previous day's one-month lows against the dollar on Thursday as prospects of a US interest rate hike in December dented the appeal of high-yielding emerging market currencies.

The rand was also victim of Standard Bank [JSE:SBK] purchasing managers' index slumping to a 15-month low, the latest sign of stress in Africa's most industrialised economy.

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By 08:40, the rand was trading at R13.9525/$, little changed from Wednesday's close at 13.9640.

This followed a fall to 13.9900 in the previous session after the US Federal Reserve said the world's biggest economy was "performing well" and could justify an interest rate hike in December.

"The rand remains at the mercy of simmering US rate hike fears," Barclays Africa said in a note.

The JSE's Top 40 futures index dipped 0.25%, pointing to the local bourse opening off 120 points.

In fixed income, the benchmark instrument due in 2026 weakened in early trading, pushing the yield 5.5 basis points higher to 8.485%.