JOHANNESBURG (Reuters) - The South African rand weakened on Monday against a buoyant dollar after cautious comments by a Federal Reserve official propped up the U.S. currency.
At 1616 GMT, the rand traded at 18.1775 against the dollar, about 0.2% weaker than its previous close. Earlier in the day, it had risen to its strongest level since August 2023.
The dollar index was up about 0.1% against a basket of currencies.
The rand slipped after Atlanta Fed President Raphael Bostic said on Monday that it will take a while for the U.S. central bank to be confident that inflation was on track to return to the central bank's 2% goal.
Markets will this week look for hints on the future interest rate path of the world's biggest economy when more Fed officials speak and the minutes of the Fed's last meeting are published on Wednesday.
The rand often takes cues from global drivers, such as U.S. monetary policy in addition to local factors.
Its recent gains have been consistent with broader emerging market currencies' performance, said Danny Greeff of ETM Analytics.
At home, opinion polls suggest the ruling African National Congress party's majority is at risk after 30 years in power, which could force it to form a coalition government, and the uncertainty about the outcome of the May 29 could weigh on the currency.
"With the elections now in sight, the ZAR might struggle for further gains... volatility could be the order of the day as the market will need to interpret what the election outcome means for coalition politics on a national level," Greeff said.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index and the broader all-share index closed about 0.7% stronger.
South Africa's benchmark 2030 government bond was stronger, with the yield down 7 basis points to 10.300%.
(Reporting by Tannur Anders and Anait Miridzhanian; Editing by Sharon Singleton and Tomasz Janowski)
