JOHANNESBURG: The South African rand weakened against the dollar on Wednesday, as investors waited for cues from the U.S. Federal Reserve on its interest rate hike trajectory later in the day.

At 1538 GMT, the rand traded at 15.8100 against thedollar, 0.3% weaker from its previous close.

The Fed is expected to announce at 1800 GMT a 50 basis pointrate hike and plans to reduce its $9 trillion balance sheet byas much as $95 billion a month.

“While the Fed’s policy decision due today has been welltelegraphed, the more pressing unknown for investors and traders is whether a 75 basis-point hike could be in the Fed’s policy pipeline over the coming months,” Han Tan, Chief Market Analyst at Exinity Group said in a note.

“Refusal to overtly rule out a 75 basis-point hike may beinterpreted as a hawkish signal, which should translate intomore gains for the U.S. dollar while sending the rest of theforex market universe into a spiral.”

South African rand dragged lower by strong dollar

Higher rates in developed markets tend to drain capital fromriskier emerging markets such as South Africa, weighing on their currencies.

Stocks also weakened as the anticipation of the Fed hit riskappetite.

The Johannesburg All-Share index fell 1.38% to 70,357 points, while the Top-40 index ended the session 1.28% lower at 63,573 points.

Among the decliners were gold miners as they tracked bullionprices.

Sibanye Stillwater Ltd, Gold Fields Ltd and Harmony Gold Mining Co Ltd declined between 1.07% and 3.6%.

Tech investor and market heavyweight Naspers dropped 4.01%.

Aspen Pharmacare fell 3.67% on news that its COVID-19 vaccination plant, Africa’s first and touted last year as a trailblazer for an under-vaccinated continent frustrated by sluggish Western handouts, risks shutting down after notreceiving a single order.