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South African rand strengths amid broad dollar weakness

The South African rand strengthened against a broadly weaker dollar on Tuesday, although worries lingered over aggressive interest hikes from global central banks.

At 1603 GMT, the rand traded at 15.8700 against the dollar, 1.09% stronger than its previous close.

The dollar index , which tracks the greenback against six other major currencies, weakened slightly to 104.35.

The focus was on Federal Reserve chair Jerome Powell's testimony to the Senate Banking Committee on Wednesday for clues on future interest rate hikes amid fears that aggressive policy tightening by central banks could usher in a recession.

The rand showed little reaction to a slight decrease in the monthly South African composite business cycle indicator (ZALEAD=ECI), which collects data including vehicle sales, business confidence and money supply.

Stocks on the Johannesburg Stock Exchange (JSE) traded higher, mirroring broader strength in equities as investors returning from a long weekend in the United States scooped up shares of megacap growth and energy companies.

"Risk assets may be in for a sympathy bounce today ... And with U.S. traders returning to their desks, it seems like a good opportunity for a small relief rally before the next leg lower for global equities," ETM Analytics said in a note.

Overall on the JSE, the All-Share index (.JALSH) rose 0.6% to 66,747 points, while the Top-40 index (.JTOPI) closed 0.5% higher at 60,374 points.

The government's benchmark 2030 bond firmed, with the yields down 7.5 basis points at 10.165%.

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