South African rand slips against dollar as U.S. recession fears weigh

(Reuters) -South Africa's rand weakened against the dollar on Thursday, as markets remained pressured by rising concerns of a recession in the United States.

At 1615 GMT, the rand traded at 16.0025 against the dollar, 0.57% weaker than its previous close.

The rand seemed little affected by South African government repealing COVID-19 rules due to a dissipating fifth wave of the pandemic, as investors continued to weigh the risk of steep interest rate rises amid fears of a global economic slowdown.

The dollar index, which tracks the greenback against six other major currencies, was up 0.25% to 104.48.

Federal Reserve Chair Jerome Powell said in testimony to Congress on Wednesday that a recession was "certainly a possibility", reflecting fears in financial markets that the Fed's tightening pace will throttle growth.

The Fed's commitment to fight inflation is "unconditional", he said on Thursday, as he continued to be grilled by the lawmakers.

Stocks on the Johannesburg Stock Exchange (JSE) traded lower for the second straight day as investors remained cautious on the heels of hot domestic May inflation data on Wednesday.

Overall on the JSE, the All-Share index fell 0.63% to 65,295 points, while the Top-40 index closed 0.67% lower at 59,019 points.

The government's benchmark 2030 bond was lower, with the yield up 3.5 basis points to 10.130%.

(Reporting by Anait Miridzhanian in Gdansk and Bhargav Acharya in Bengaluru; Editing by Rashmi Aich and Alison Williams)