South African rand slides as coronavirus infection rise dims outlook

PUBLISHED: Tue, 07 Jul 2020 13:58:40 GMT

JOHANNESBURG (Reuters) – South Africa’s rand weakened in early trade on Tuesday as worries over surges in coronavirus infections reactivated investor concerns about the economic impact of the pandemic.

At 0700 GMT, the rand was 0.43% weaker at 17.0875 per dollar from an overnight close of 17.00 in New York as sentiment again swung from optimism to nervousness with investors continuing to assess the COVID-19 impact.

Deaths from the coronavirus pandemic in India surpassed 20,000 and case numbers increased, with infections in the United States also jumping, dampening global enthusiasm over the easing of lockdowns.

Locally, COVID-19 deaths accelerated past the 3,000 mark with infections nearing 200,000.

“Despite the recent easing of local lockdown measures, the current levels of activity in markets have yet to suggest any recovery,” analysts at Nedbank said in a note.

“The rand is currently trading in the middle of the short-term technical range, and the objective on the downside remains around the 16.7000 level.”

Bonds were also weaker, with the yield on the benchmark 2030 government issue rising 11 basis points to 9.625%.

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