South African rand recovers slightly ahead of key U.S. data

(Reuters) -South Africa's rand recovered slightly on Thursday after hitting a 21-month low a day earlier as traders awaited key U.S. data that could give clues to the pace of inflation amid fears of a global recession. At 1630 GMT, the rand traded at 16.7400 against the dollar, 0.34% firmer than its previous close. It hit a near two-year low of 16.8575 on Wednesday. The dollar index, which measures the currency against six counterparts, was trading at 107.15, not far from an overnight peak of 107.27, a level unseen since late 2002.

High yielding, but riskier assets such as the rand are relatively unattractive to investors against the safe-haven dollar at times of economic uncertainty.

Investors will now be keeping a close eye on the June non-farm payrolls report on Friday, to gauge the health of the economy, as they weigh the risks of a recession with the Federal Reserve hiking rates aggressively.

"The rand... is at risk of further weakness, as the U.S. continues to show a strong resolve to reducing inflation," Investec analyst Annabel Bishop said in a research note.

Stocks closed higher on the Johannesburg Stock Exchange (JSE), reflecting gains in global equities, which were buoyed by a jump in oil prices and tech stocks, including of chipmakers.

On the JSE the All-Share index rose 3.27% to 67,909 points, while the Top-40 index closed 3.46% higher at 61,771 points, with market heavyweights Naspers, Prosus and Sasol Ltd ending up 8.90%, 8.29% and 10.62% respectively.

The government's benchmark 2030 bond was stronger, with the yield down 12.5 basis points to 10.590%.

(Reporting by Anait Miridzhanian in Gdansk, Nellie Peyton in Dakar and Bhargav Acharya in Bengaluru; Editing by Sherry Jacob-Phillips, William Maclean)