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South Africa’s rand slips on U.S. economic optimism, rising cases in Europe

PUBLISHED: Mon, 29 Mar 2021 07:03:04 GMT

JOHANNESBURG, March 29 (Reuters) – South Africa’s rand fell in early trade on Monday, as renewed optimism about the pace of economic growth in the United States were offset by worries over rising coronavirus infections in Europe, putting demand for riskier assets under pressure.

At 0640 GMT the rand was 0.35% weaker at 15.0425 per dollar, creeping back towards the two-week low it touched last week after the local central bank kept rates unchanged.

The greenback was up against most currencies in early trade as cautious investors favoured safe haven assets. As U.S. economy gains strength amid a rapid vaccine rollout in the world’s largest economy, a rise in COVID-19 infections in Europe has led to a fall in risk demand.

U.S. jobless claims fell to a one-year low last week and President Joe Biden said he would double his vaccination goal, after surpassing 100 million shots 42 days ahead of schedule.

“Any strength in the local unit has been met by demand for USD; as a result, it would appear that an attempt on the 15.2000 level is growing ever more likely. Globally, the main focus remains on the ever-increasing infection rates,” said analysts at Nedbank.

Bonds also weakened, with the yield on the benchmark 2030 paper up 2.5 basis points to 9.51%.

(Reporting by Mfuneko Toyana; Editing by Rashmi Aich)

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