South African rand weakens as firmer dollar and hawkish Fed dampen risk appetite
JOHANNESBURG, June 24 (Reuters) - The South African rand weakened in early trade on Wednesday, pressured by a firmer dollar and hawkish signals from the U.S. Federal Reserve that dampened appetite for riskier assets.
At 0715 GMT, the rand traded at 16.60 against the dollar ZAR=D3, about 0.3% down from its previous close.
The dollar index =USD, which measures the U.S. dollar against a basket of currencies, climbed to its strongest in 13 months as investors positioned for possible Federal Reserve increases to U.S. interest rates and sought shelter from a selloff in technology shares.
"Geopolitical risks are on the back burner for now, with markets reverting to economic fundamentals as drivers for the dollar," said Andre Cilliers, currency strategist at TreasuryONE.
Like other risk-sensitive currencies, the rand often takes cues from global drivers.
On the Johannesburg Stock Exchange, the Top-40 index .JTOPI was up 0.1% in early trade.
South Africa's benchmark 2035 government bond ZAR2035= was weaker in early deals, with the yield up 2.5 basis points at 8.36%.