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South African Rand Extends this Week's Losses; Stocks Dip

JOHANNESBURG, Dec 15 (Reuters) - The South African rand extended this week's losses on Wednesday, as surging COVID-19 infections locally and a U.S. Federal Reserve policy announcement later in the day sapped risk appetite.

At 1552 GMT, the rand traded at 16.1825 against the dollar, around 0.5% weaker than its previous close.

South Africa reported over 23,000 new COVID-19 cases on Tuesday in a fourth wave linked to the Omicron variant, approaching an all-time high number of daily infections.

At 1900 GMT the Fed is expected to announce that it is speeding up the end of its pandemic-era bond purchases and signal a turn to interest rate rises next year as a guard against inflation at near four-decade highs.

U.S. interest rate hikes tend to drain capital away from higher-yielding but riskier emerging markets including South Africa, weighing on their currencies.

Earlier on Wednesday, data showed annual consumer inflation accelerated to 5.5% in November from 5.0% in October, slightly ahead of economists' forecasts for a 5.4% reading.

November producer inflation came in well above expectations at 9.6% versus predictions for 8.9%.

The Johannesburg stock market was mostly muted, with a marginal loss at the day's close as investors were cautious before the Fed's policy statement.

The All-share index lost 0.11% to end at 71,467 points and the blue-chip Top-40 index dropped 0.17% to 65,102 points.

Reporting by Alexander Winning and Promit Mukherjee; Editing by Giles Elgood

Source: Reuters

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