Today, the rand fell to seven-month lows against the dollar, largely reflecting a stronger greenback as recent data backs the case for monetary tightening in the United States. Two Hours ago the rand traded at 10.9985 versus the dollar, down 0.21% from Thursday’s close. If fell to 11.0300 earlier in day, the weakest it has been since 21 February 2014. Government bonds followed suit, with the yield on the 2026 benchmark adding 4.5 basis points to 8.26%.
The rand was one of the biggest casualties in a basket of 20 emerging market currencies, outperforming only the Turkish lira, the Russian rouble and Brazil’s real. “The latest bout of EM currency weakness largely reflects the depreciation of the euro against the dollar, rather than home-grown economic vulnerabilities,” William Jackson, an emerging markets analyst at Capital Economics, said.
But rand sentiment has taken a knock from weak domestic economic indicators released this week, including a gaping current account deficit, while factory output was at its weakest in five years.