South African rand gains as softer dollar offsets reduced Fed cut hopes

JOHANNESBURG, March 16 (Reuters) - The South African rand strengthened on Monday, as a softer dollar helped offset fading hopes of a near-term interest rate cut by the U.S. Federal Reserve due to the elevated energy prices.

* At 1448 GMT the rand traded at 16.77 against the dollar,more than 1% stronger than its previous close. * The greenback was down 0.4% against a basket ofcurrencies. * Gold prices, a key South African export, were steady onMonday after recovering from an earlier near 1% drop, supportedby a softer dollar. * On the Johannesburg Stock Exchange, the Top-40 index waslast up 1.3%. * South Africa's benchmark 2035 government bond was alsostronger, as the yield fell 2 basis points to 8.91%. * Later this week local investor attention will turn toFebruary inflation data and January retail sales numbers. * South African inflation expectations continued to fall inthe first quarter of this year, a survey showed on Monday, withthe average forecast for inflation over the next five yearsreaching a record low.

(Reporting by Anathi Madubela and Sfundo Parakozov;Editing by Ros Russell)