Mfuneko Toyana | JOHANNESBURG

South Africa’s rand extended gains to near a two-month high on Thursday as the dollar stumbled after minutes of a policy meeting of the U.S. central bank showed members agreed on delaying rate hikes.

At 0640 GMT, the rand had firmed 0.35 percent to 12.8800 per dollar, its firmest since March 30, compared to a close of 12.9250 in New York on Wednesday.

The rand touched a session high of 12.8700 overnight following better-than-anticipated moderation of consumer prices on Wednesday, with April price growth dipping below the top of the Reserve Bank’s 3-6 percent target for the first in nine months.

The currency then extended gains following the release of minutes from latest Federal Reserve meeting, showing policymakers agreeing to hold off on rate increases until they see evidence that a recent economic slowdown was transitory.

South Africa’s central bank is due to announce its latest interest rate decision later on Thursday. The bank kept rates on hold the whole of 2016, but has said it had reached the end of tightening cycle that begun in 2014.

Stocks were set to open higher at 0700 GMT, with the JSE securities exchange’s Top-40 futures index up 0.3 percent.

In fixed income, the yield for the benchmark government bond due in 2026 fell 1.5 basis points to 8.485 percent.

(Reporting by Mfuneko Toyana; Editing by Ed Cropley)