S.African rand weakens as dollar gains on higher rate hike bets

(Reuters) -South Africa's rand weakened on Tuesday after the dollar rose as markets priced in higher interest rate hikes by the U.S. Federal Reserve to tame soaring inflation.

At 1530 GMT, the rand traded at 16.9150 against the dollar, 0.42% weaker than its previous close.

The dollar index, which measures the U.S. currency against six rivals, was last up 0.08% at 108.72, after reaching a two-decade high of 109.48 overnight.

Traders increased their bets on the chance of a third straight 75-basis-point rate hike by the Fed in September to 76.5%.

The safe-haven dollar was also supported by a report that showed the U.S. consumer confidence index rebounded more than expected in August.

The risk-sensitive rand is highly susceptible to swings in global sentiment and the outlook for U.S. monetary policy.

Stocks on the Johannesburg Stock Exchange fell, weighed down mainly by miner Harmony Gold Mining Company Ltd, which ended 11% lower after reporting its annual profits had halved.

Overall on the JSE, the Top-40 index dropped 1.96%, while the broader all-share index closed down 1.89%.

The government's benchmark 2030 bond fell, with the yield up 8.5 basis points at 10.330%.

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