JOHANNESBURG, Sept 25 (Reuters) – South Africa’s rand extended its recent rally on Wednesday, strengthening to a fresh 20-month high against the dollar.

At 0810 GMT, the rand traded at 17.22 against the U.S. currency, 0.3% stronger than its previous close and its strongest level since early February 2023.

Analysts have partly attributed the rand’s current strength to positive sentiment in the wake of interest rate cuts by the South African Reserve Bank (SARB) and U.S. Federal Reserve.

“We are likely to continue to trade in a R17.20/R17.40 range for now,” said Andre Cilliers, currency strategist at TreasuryONE.

On Thursday South Africa-focused investors will shift their focus to August producer inflation figures, which will shed further light on the extent to which price pressures are easing.

Slowing consumer inflation helped convince the SARB to cut rates last week.

Earlier on Wednesday central bank data showed a composite leading business cycle indicator rose 0.7% month on month in July. The indicator reflects vehicle sales, business confidence, money supply and other factors in Africa’s most industrialised economy.

The Johannesburg Stock Exchange’s Top-40 index was up 1.5% after touching a new high earlier in the session.

South Africa’s benchmark 2030 government bond was slightly weaker, with the yield up 1.5 basis points to 8.86%.

(Reporting by Bhargav Acharya, additional reporting by Ankika Biswas in Bengaluru; Editing by Alexander Winning and Toby Chopra)