Rand pressured as risk appetite wanes

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IOL pic mar25 rsa bank notes Reuters File picture: Siphiwe Sibeko

Johannesburg - South Africa's rand was still under pressure on Thursday after breaching the key 10.6000 mark to 2-1/2 week lows the previous session, with investor worries about the political crisis in Ukraine seen keeping risk appetite in check.

On the domestic front, investors are hoping for a resolution to a months long wage strike in the platinum sector which has hit output at the world's biggest producers of the industrial metal, undermining exports.

By 06h48 GMT the local unit was changing hands at 10.5852 to the dollar, not far off Wednesday's close at 10.5950.

Government bonds pulled back from the previous day's multi-week lows, with yields for the 2026 and 2015 benchmark issues each shedding 1.5 basis points to 8.49 percent and 6.835 percent respectively.

The rand hit a trough of 10.6265 against the greenback on Wednesday, its weakest since April 4 according to Thomson Reuters data, as weak Chinese factory data and a deepening crisis in Ukraine weighed on emerging market assets investors see as carrying more risk.

But Wednesday's softer than expected US housing data and manufacturing PMI could boost these markets, as they suggest there is no urgency for the Federal Reserve to tighten its accommodative monetary stance, Barclays Africa said in a research note.

“Similar considerations makes today's US durable goods orders and weekly jobless claims also worth watching. Rand bulls may also get some encouragement if the resumption of (wage) talks bring the three-month long platinum strike to an end,” the bank said. - Reuters


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