South Africa's rand weakens against the dollar - CNBC Africa

South Africa's rand weakens against the dollar

Special Report

by Reuters 0

South Africa's rand weakened against the dollar on Thursday ahead of U.S. GDP data that could reinforce expectations the Federal Reserve will raise interest rates in September, sapping liquidity for emerging market currencies.

At 0620 GMT, the rand was half a percent weaker at 12.6100 against the dollar compared to 12.5500, its closing level in New York.

"The rand is range-trading on the back of an uneventful FOMC statement, but is at risk of dipping weaker on a strong U.S. GDP print," Rand Merchant Bank said in a note.

The currency touched its strongest level in week last night during the Federal Open Market Committee statement as investors initially thought it was dovish on rates, but it has retreated on expectations of an earlier rate hike.

"The initial market reaction showed a dovish interpretation of the Fed statement as the U.S. dollar weakened but the unit quickly eliminated all losses," RMB added.

On the local front, investors will also pay attention to South African producer inflation numbers and trade figures.

The yield on the 2026 government bond was up 1.5 basis points at 8.205 percent.

Comments