South Africa's rand falls but set for weekly gains
JOHANNESBURG, July 30 (Reuters) - South Africa's rand fell early on Friday, but was on course for weekly gains on renewed signs that the U.S. Federal Reserve might not taper economic support and hike interest rates in the near term.
At 0620 GMT, the rand ZAR= traded at 14.6030 against the dollar, 0.37% weaker than its previous close.
"As the month and the week draw to a close, we are likely to see some position squaring going into the close, and liquidity is likely to be tested," analysts at Nedbank said in a note.
The rand is up more than 1% since Monday, thanks to a weaker dollar after Fed Chairman Jerome Powell wrongfooted bulls after a policy meeting this week by saying that rate increases were "a ways away" and the job market still had "some ground to cover".
Riskier currencies such as the rand thrive on U.S. interest rates remaining low because they benefit from the interest rate differential that increases their appeal for the so-called carry trade, in which investors borrow in a low yielding currency to invest in higher yielding assets.
Reporting by Olivia Kumwenda-Mtambo; Editing by Alex Richardson
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