South Africa’s rand firmed slightly on Thursday, as the dollar slipped but still traded near a 16-month high after investors bet that the U.S. Federal Reserve will tighten monetary policy faster than its peers.
At 1500 GMT, the rand traded 0.2% firmer at 15.8600 against the dollar.
Fed minutes showed on Wednesday that various policymakers at the U.S. central bank would be open to speeding up the taper of their bond-buying programme and raising interest rates more quickly if high inflation held.
Dollar (.DXY) moves have been one of the main drivers for the rand in recent days, along with emerging market contagion linked to a meltdown in the Turkish lira .
On the domestic front, data showed producer inflation (ZAPPIY=ECI) quickened in October, providing more clues about price pressures in Africa’s most industrialised economy.
Last week, the South African Reserve Bank raised rates for the first time in three years in response to broadening inflationary risks, but that has done little to buttress the rand, which is down roughly 4% against the dollar this month.