Johannesburg — South Africa’s rand weakened against the U.S. dollar in early trade on Friday, as concerns about global economic growth weighed on risk sentiment.
At 0727 GMT, the rand traded at 18.6300 against the dollar, 0.54% weaker than its previous close.
Hawkish comments from global central banks, including the U.S. Federal Reserve, stoked fears that their aggressive monetary tightening could push economies into a deeper downturn.
The safe-haven dollar was buoyed by the comments and was last trading up 0.62% at 103.2 against a basket of six currencies.
“This morning, the rand has opened weaker at 18.60, aligning with the strength of the dollar, and there is a possibility of further losses towards the 18.75 level in the near future,” said Andre Cilliers, a currency strategist at TreasuryONE.
The risk-sensitive rand, like most emerging market currencies, often takes cues from global drivers such as U.S. monetary policy and the dollar in the absence of local economic data points.
In the stock market, both the Top-40 (.JTOPI) index and the broader all-share (.JALSH) were down nearly 0.3% in early trade.
South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 6 basis points to 10.755%.
*Bhargav Acharya; Editing: Sonia Cheema – Reuters
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