Rand falls to two-week lowComment on this story
Johannesburg - The rand fell to its weakest in a fortnight against the dollar on Wednesday, hit as emerging market currencies came under pressure because of growth concerns in China.
The world's second largest economy is also a major importer of South Africa's minerals, and a slowdown there could hit already struggling exports in Africa's powerhouse.
The rand tracked other commodity-linked currencies lower on Wednesday, hitting its weakest in two weeks earlier in the session.
By 18:00 SA time, the currency had come back to trade at 10.8600 per dollar, nearly unchanged from its close of 10.8625 per dollar in New York on Tuesday.
Concerns around tensions in Ukraine also unnerved investors, who preferred to hold onto safe-have assets during the uncertainty.
The poor global picture overshadowed better-than-expected fourth quarter current account data from the South African Reserve Bank.
“This morning's narrower current account deficit only weighed temporarily on the dollar/rand pair,” Tradition Analytics said in a note.
“With concerns mounting on the Chinese growth front and talk of real money selling of riskier emerging market currencies, dollar/rand has cruised back above the 10.9000 handle and posted near 2-week highs.”
The central bank data, usually a sensitive topic for the rand, showed the current account narrowed more than expected in the last three months of the year to 5.1 percent of GDP, as the weaker currency helped to curb the import bill.
Yields on the 2026 government bond rose 3.5 basis points to 8.595 percent and climbed two basis points to 7.06 percent on the 2015 note. - Reuters