JOHANNESBURG, March 31 (Reuters) – South Africa’s rand fell in early trade on Wednesday, hit by higher demand for the dollar and other safe haven assets as fears of rising coronavirus infections and higher U.S. bond yields dampened demand for emerging market assets.
At 0650 GMT the rand was 0.15% weaker at 14.9400 per dollar compared to an overnight close of 14.9175.
The greenback rose to a fresh one-year high versus the yen and multi-month peaks with other rivals as investors bet that massive fiscal stimulus and aggressive vaccinations will help the United States lead a global pandemic recovery.
The rand has seen erratic trade this week, initially pulling away from two-week lows above the 15.00 mark, but it struggled to sustain those gains, with a patchy recovery reflected in local economic data and a still-slow rollout of vaccines stifling demand.
In a speech late on Tuesday, President Cyril Ramaphosa said phase one of the country’s vaccination programme, which involves inoculating 1.25 million health workers, is on track to be completed within three months after starting in the middle of February.
Money supply and credit extension continued to remain slow in February, with latter at its lowest since late 2010 despite the central bank cutting lending rates to record lows and indicating last week that it would keep them there for the remainder of 2021.
Balance of trade data is due at 1200 GMT and a monthly measure of purchasing manager activity comes out on Thursday, but levels are set to be influenced by month-end flows for the remainder of the week, traders said, likely keeping the rand weak.
Bonds firmed, with the yield on the benchmark 2030 issue down 2 basis points to 9.52%. (Reporting by Mfuneko Toyana; Editing by Rashmi Aich)
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