JOHANNESBURG, March 9 (Reuters) - The South African rand
firmed early on Thursday against a weaker U.S. dollar, despite
S&P Global's late night announcement that it had downgraded its
outlook on South Africa.
At 0654 GMT, the rand traded at 18.5850 to the
dollar, more than 0.2% stronger than its previous close. The
previous day it hit 18.7200, the lowest in almost three years.
The dollar was down almost 0.1% against a basket of
global currencies, after reaching a 2023 high in the previous
session on hawkish comments from U.S. Federal Reserve Chair
Jerome Powell.
Investors will now be looking to U.S. jobs data due on
Friday for confirmation that strong jobs growth supports bigger
interest rate increases.
S&P Global said late on Wednesday that it had downgraded
South Africa's outlook to "stable" from "positive", citing
infrastructure constraints and severe power cuts.
The downgrade followed disappointing gross domestic product
data released earlier this week, which showed South Africa's
economy contracted more than expected in the last quarter of
2022 and could be on track for a recession if it shrinks again
this quarter.
"The news by S&P, although negative, is priced in and
changes little," said ETM Analytics in a research note.
"With so much negative news around, the surprise would've
been if S&P did not cut the outlook."
The government's benchmark 2030 bond was slightly
weaker in early deals, with the yield up 2 basis points to
10.185%.
(Reporting by Nellie Peyton
Editing by Alexander Winning)
