S.Africa's rand weakens ahead of GDP, unemployment data

by Reuters 0

South Africa’s rand weakened to a two-week low against dollar early on Tuesday, with traders cautious ahead of local growth and unemployment data.

At 0643 GMT the rand was 0.61 softer at 12.0025 per dollar, its weakest since May 13.

(READ MORE: S.Africa’s rand surrenders post-fed gains)

“The scope for volatility increases today given the numerous data risks and as London and New York trade returns from the long weekend,” Carmen Nel and John Cairns of Rand Merchant Bank said in a note.

“Today’s local focus will be on the Q1 2015 GDP figure. The focus in the afternoon switches to U.S. data,” they said, adding the timing of a U.S. Federal Reserve rate hike remained the key theme for markets.

The dollar hit a fresh one-month high against a basket of major currencies, extending a rally triggered by Friday’s comments from Federal Reserve Chair Janet Yellen, who rekindled expectations the central bank was gearing up to hike rates.

Investors also await the latest batch of U.S. data later on Tuesday that could provide more clues on the strength of the U.S. economic recovery, including April durable goods and May consumer confidence.

Government bonds weakened, pushing the yield on the 2026 benchmark up three basis points to 8.140 percent.