Rand at low against the US dollarComment on this story
Johannesburg - South Africa's rand weakened against the dollar early on Monday, extending its retreat from a recent rally as it tracked a lower euro amid broad investor aversion to risky assets.
The rand came under renewed selling pressure as the euro fell after European Central Bank officials over the weekend expressed unhappiness with a strong currency, saying it may require accommodative monetary policy.
Europe is a major consumer of South African exports, putting the local unit in the shadow of the single currency.
Emerging markets were also pressured by the Ukraine crisis, with Kiev giving pro-Russian separatists a Monday morning deadline to disarm or face a “full-scale anti-terrorist operation” by its armed forces.
At 08:45 SA time, the rand was down 0.4 percent at 10.5330 to the dollar, its weakest since last Monday.
It closed in New York on Friday at 10.4910.
“Not only is the dollar currently enjoying broad-based strength as a result of suggestions that the ECB may embark upon some quantitative easing measures, but global risk appetite also appears to have soured due to escalating geopolitical tensions between Ukraine and Russia,” Barclays Africa analysts said in a market note.
The trading week will be shortened by Easter national holidays in South Africa on Friday and Monday, and dealers expect low volumes to bring extra volatility to the markets.
Government bonds tracked the rand weaker, with yields up 3 basis points to 8.355 percent on the benchmark 2026 issue and 1.5 basis points to 6.735 percent on the 2015 note. - Reuters