JOHANNESBURG, Oct 11 Reuters South Africa39;s rand strengthened against the dollar on Friday, after U.S. data firmed up bets on another interest rate cut by the Federal Reserve next month.

At 0809 GMT, the rand traded at 17.4575 against the dollar , about 0.4 stronger than its previous close.

The dollar index was last down 0.04 against a basket of currencies.

Bets for a 25basis point Fed rate cut increased after US inflation data on Thursday came in slightly higher than expected and jobless claims rose, leading markets to moderate expectations of bigger cuts by the Fed.

Inflation did come down yesterday, but… it is the jobless claims that has helped the ZAR back to 17.50, said Adam Phillips, treasury specialist at Umkhulu Treasury.

The local currency has tracked the dollar and U.S. economic data points this week in the absence of major domestic events.

South African investor focus will now turn towards an inflationlinked bond auction ILB due later on Friday.

The ILB auction today will provide further insight into inflation expectations in South Africa, said Andre Cilliers, currency strategist at TreasuryONE.

On the stock market, the Top40 index was up 0.4.

South Africa39;s benchmark 2030 government bond was stronger, with the yield down 7 basis points to 9.07.

Reporting by Bhargav Acharya; Editing by Toby Chopra

Source Reuters