South Africa's rand edges lower after U.S. GDP - CNBC Africa

South Africa's rand edges lower after U.S. GDP

Southern Africa

by Reuters 0

South Africa's rand edged weaker on Friday after tumbling to its weakest in nearly a decade. PHOTO: REUTERS/Siphiwe Sibeko

South Africa's rand edged weaker on Friday after tumbling to its weakest in nearly a decade and half as U.S. GDP data bolstered the case for a Federal Reserve rate hike this year.

At 0615 GMT the rand weakened 0.1 percent to 12.7150 per dollar, regaining some ground after slipping to 12.7550 overnight, a level last seen in December 2001.

The U.S. economy grew 2.3 percent at an annual rate in the second quarter, data showed on Thursday, triggering a heavy selloff as investors ditched EM assets in favour of the dollar, with the rand among the hardest hit.

The rand has fallen 10 percent since the beginning of 2015 and may weaken further in the session if government budget and trade data disappoint.

"With the S.A. trade data out today coupled with the U.S. Chicago PMI index anything is possible," said Standard Bank trader Warrick Butler, adding that a push past the 12.75 technical support could open the door to new lows.

Yields on government bonds were flat after rising in the previous session, with the benchmark 2026 issue unmoved at 8.23 percent..

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