rate cuts this year, which have boosted attractiveness of the returns it offers. A lower return on U.S. rate-linked assets often pushes investors to buy higher-yielding emerging market currencies.
But the lower probability of the Fed further cutting rates next year, which has dropped to around 30%, prompted traders to warn the rand’s advance would be short-lived, especially in light of growing concern around economic growth. Retail sales rose 0.2% year-on-year in September following a revised 1% increase in August, data from Statistics South Africa showed on Wednesday, another sign Africa’s most industrialised economy will struggle to top the 1% mark this year.
A strike over possible job cuts planned for Friday by a majority of South African Airways employees is also set to hurt sentiment toward the rand.On the bourse, stocks were down slightly alongside emerging market shares on Wednesday as U.S President Donald Trump offered few clues on a trade truce with Beijing.
Entertainment company Multichoice Group and dual-listed Dutch internet group Prosus NV slid to the bottom of the blue-chip index with Multichoice down 2.43% and Prosus closing 2.36% lower.
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