Rand hits fresh 3-week low against US dollarComment on this story
Johannesburg - South Africa's rand fell to a 3-week low against the dollar on Wednesday, extending losses triggered by contracting domestic economic growth data and a rally in the dollar.
The rand fell over half a percent to 10.5220, breaching key 10.50 support as investors digested signals the South African economy was heading for a recession, and as the dollar rallied after data showed US durable goods sales unexpectedly rose in April and consumer confidence perked up in May.
A mines strike in the platinum sector was the main contributor to South Africa's falling GDP, and there were signs on Wednesday morning that talks between platinum mining companies and the striking Amcu union had broken down.
“A stronger dollar and a weaker economy have pushed the rand weaker,” John Cairns, forex strategist at Rand Merchant Bank, said in a note.
Emerging markets are also under pressure as investors prefer safe haven assets on fresh jitters around the Ukraine crisis.
Yields on government bonds tracked the weaker rand, climbing six basis points to 8.25 percent on the 2026 issue and rising 5 basis points to 6.655 percent on the 2015 note. - Reuters