South African rand slides as US inflation print boosts Fed tightening bets

By Reuters News

JOHANNESBURG, Oct 14 (Reuters) - The South African rand weakened sharply on Wednesday after a hotter-than-expected US inflation reading boosted expectations that the Federal Reserve could raise interest rates later this month.

  • At 1415 GMT, the rand traded at 16.62 against the dollar , about 0.8% weaker than its previous close.

  • The dollar index , which measures the greenback against a basket of currencies, rose to 102.87, up 0.7% on Tuesday's close.

  • The US Consumer Price Index rose 0.6% last month after climbing 0.4% in August, the Labor Department's Bureau of Labor Statistics said on Wednesday.

  • Markets see about a 44% chance of a US rate hike this month, up from about 22% before the inflation data, and are pricing a 95% probability of an increase in December, according to CME's FedWatch Tool.

  • With no major domestic data due, the rand takes its cue from global developments, particularly US economic indicators and geopolitical events.

  • On the Johannesburg Stock Exchange, the Top-40 index .JTOPI was last down 1%.

  • South Africa's benchmark 2035 government bond strengthened, as the yield fell 2 basis points to 8.74%.

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