South Africa’s rand fell to a new 13 year-low against the dollar early on Wednesday, extending losses triggered by a sell-off of emerging market currencies on expectations that U.S. interests rates could rise by mid-year.
At 0547 GMT the rand was trading at 12.3775 to the dollar, its weakest level since Jan. 2002, according to Thomson Reuters data.
Riskier assets have come under pressure after Friday’s robust U.S. employment data increased expectations that the Federal Reserve could raise rates as soon as June – a prospect that appeared relatively remote a few weeks prior.
Renewed concern about Greece’s debt talks with euro zone partners and deflationary pressures in China have also weighed on emerging markets in general.
“With little in the way of data today, (dollar) performance will continue to drive the (rand) and, in turn, local yields,” Barclays Africa said in a note.
Government bonds have not been spared in the sell-off, with the yield for the 2026 benchmark up 3.5 basis points to 8.010 percent.