Rand on fresh Low against the US Dollar

The rand extended losses against the dollar on Monday, hitting a new one-week low, as a basket of currencies suffered at the hand of a stronger greenback.

At 16:37 GMT the rand was trading 0.74% weaker at R12.1240 to the dollar compared with its closing level on Friday. “It’s a general risk-off feel to the market and also the dollar strengthened on the day,” Rand Merchant Bank trader Jim Bryson said.

The dollar index, which measures the greenback against a basket of six major currencies, was up 0.54% at 97.817. The rand flirted with three-week highs in the previous week before capitulating to a firming dollar, as inflation pressures increased with local petrol prices set to rise 14% on Wednesday.

News has also emerged over the weekend that the government has failed to reach an agreement with the public service unions over workers’ pay. While national wage growth has on aggregate run above inflation over recent quarters, public sector wage growth per employee has stagnated. Strike action by the 1.3 million nurses, teachers and police officers over the coming months would put an additional debt in the rand. These local factors must be put into the context of the dollar bull-market.

Government bonds also weakened, and the yield for the 2026 benchmark was up 8 basis points to 7.910%.

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