Rand slips, stocks down

South Africa's rand slipped more than 1.5 percent against a firmer greenback on Tuesday, extending its losses.

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Johannesburg - South Africa's rand slipped more than 1.5 percent against a firmer greenback on Tuesday, extending its losses to a 1-1/2 week trough as expectations of a rate hike in the United States soured risk sentiment.

By 1114 GMT the rand had weakened 1.51 percent to 13.6850 per dollar, its weakest level since September 11, while the dollar hit an almost two-week high against a basket of currencies.

“Emerging markets have weakened. It's a risk-off scenario today and the Fed didn't do anyone any favours last week,” said John Cairns, a currency strategist at Rand Merchant Bank.

The US Federal Reserve kept interest rates unchanged last week, saying economic developments globally were putting downward pressure on inflation but not altogether precluding a hike in December, fuelling uncertainty that has hurt sentiment toward emerging assets.

Turkey's lira, Russia's rouble and the Brazil real weakened against the dollar, but the rand fell most among its peers.

The dollar had firmed during the previous session after comments from United States Federal Reserve officials pointed to the bank resuming policy tightening by year-end after leaving interest rates on hold last week.

The South African Reserve Bank's (SARB) decision on interest rates is due on Wednesday.

A Reuters poll showed 28 of 31 economists expecting the repo rate to remain steady at 6.00 percent.

South Africa's statistics agency publishes consumer and producer inflation data ahead of the rate decision.

In the past two weeks the rand has struggled to hold on to gains past the 13.25 resistance, leaving it open to a retreat beyond 13.50.

“The expectation is for an initial pullback towards 13.3500 with 13.4000 first stop, this should be used to load up on some cheap dollars,” said Maemo Rametse of Standard Bank.

Yields on government bonds were mixed across the curve after they fell at a government auction of long-dated issues.

The benchmark 2026 issue added 1 basis points to 8.37 percent.

Stocks were lower on South Africa's blue-chip Top-40 index , which was down 1.72 percent by 1114 GMT.

REUTERS