South African rand weakens ahead of Fed decision
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FILE PHOTO: South African Rand coins are seen in this illustration picture taken October 28, 2020. REUTERS/Mike Hutchings/Illustration/File Photo
JOHANNESBURG (Reuters) -South Africa's rand weakened against a stronger dollar on Tuesday as investors turn their attention to the Federal Reserve's interest rate decision.
At 1502 GMT, the rand traded at 18.16 against the greenback, about 1.7% weaker than its previous close.
The dollar index was last trading up about 0.12% against a basket of currencies.
The Fed will announce its interest rate decision on Wednesday, with markets expecting a 25 basis point cut, but the focus will also be on the central bank's tone on rates for the year ahead.
"A conservative tone will likely support the USD and pressure EM (emerging market) currencies, including ZAR," said Andre Cilliers, Currency Strategist at TreasuryONE.
Earlier in the day, central bank data showed South Africa's composite leading business cycle indicator rose 1.1% month on month in October.
On the stock market, the Top-40 index closed down about 1.6%.
South Africa's benchmark 2030 government bond was weaker, with the yield up 7.5 basis points at 8.995%.
(Reporting by Bhargav Acharya; Editing by Kirsten Donovan and Angus MacSwan)
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