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South African rand edges lower in cautious trade

PUBLISHED: Tue, 13 Apr 2021 07:08:32 GMT

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JOHANNESBURG, April 13 (Reuters) – The South African rand weakened slightly early on Tuesday, dragged down by a souring of global sentiment towards emerging markets as the dollar began to climb again.

At 0700 GMT the rand was 0.12% weaker at 14.5800 per dollar, having closed at 14.5625 overnight in New York.

Investors were mostly holding fire on large bets ahead of U.S. inflation data that will give further indications on the direction of lending rates in the world’s biggest economy.

Accommodative monetary and fiscal policy there has fuelled flows to riskier emerging market assets, but a steady rise in Treasury yields has raised fears of a quicker rise in rates.

“Any suggestions of rising inflationary pressures in today’s U.S. CPI print for March could potentially reignite the rise in UST yields that caused havoc in global markets through Q1,” said ETM Analytics economists said in a note.

Domestically, February mining output data at 0930 GMT is the only big-ticket release.

Higher global commodity prices since late 2020 have supported the currencies of resource exporters such as South Africa while also boosting tax revenue.

Bonds were also weaker, with the yield on the benchmark 2030 government issue up 2 basis points at 9.375%. (Reporting by Mfuneko Toyana Editing by David Goodman )

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