South African rand knocked down as early Fed rate cut hopes fade

JOHANNESBURG (Reuters) -The South African rand weakened on Monday as traders scaled back their expectations for aggressive interest rate cuts by the Federal Reserve this year.

The rand traded at 19.0800 against the dollar at 1600 GMT, down 0.94% from its previous close.

In a U.S. interview aired on Sunday night, Fed Chair Jerome Powell said the central bank could be patient in deciding when to cut its benchmark interest rate.

"The ongoing knocks to market confidence on early U.S. interest rate cut hopes has negatively affected the rand, and indeed most EM (Emerging Market) currencies," said Investec chief economist Annabel Bishop in a research note.

The dollar index was last trading up 0.52% against a basket of major currencies.

Market-moving news locally this week could come from the Investing in African Mining Indaba conference, which opened in Cape Town on Monday, and President Cyril Ramaphosa's State of the Nation Address on Thursday.

The S&P Global South Africa Purchasing Managers' Index (PMI) for January released on Monday showed private sector activity contracted for a second consecutive month in Africa's most industrialised economy.

On the stock market, the Top-40 and the broader all-share indices closed around 0.5% lower.

South Africa's benchmark 2030 government bond slipped, with the yield up 9 basis points at 9.870%.

(Reporting by Nellie Peyton and Bhargav AcharyaEditing by David Goodman and Christina Fincher)