Cape Town - The rand slumped to a three-week low and South African bond yields rose to the highest in three months on concern that the nation will struggle to plug its current-account shortfall as US monetary stimulus wanes.
South Africa posted a current-account deficit of 6 percent of gross domestic product in the third quarter, a report may show today, according to the median estimate of 11 economists in a Bloomberg survey.
Employers in the US boosted jobs last month by the most since June, a report tomorrow may show after data yesterday showed manufacturing unexpectedly accelerated in November at the fastest pace since April 2011.
“The rand is under threat,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said in an e-mail.
“Strong US data has revived tapering fears, while today’s current-account number should show a massive funding hole that needs to be filled.”
The rand declined 0.2 percent to 10.2964 per dollar as of 9:08 a.m. in Johannesburg, the weakest level since November 14 on an intraday basis.
Yields on benchmark bonds due 2026 climbed two basis points, or 0.02 percentage point, to 8.44 percent, the highest on a closing basis since September 5.
Foreign investors sold a net 529 million rand ($51 million) of South African bonds yesterday, a ninth straight day of outflows, according to JSE Ltd. data.
Investors also sold a net 265 million rand of equities, bringing capital outflows since the beginning of November to 32.6 billion rand.
ADP Research Institute will probably say tomorrow companies in the US added 170,000 positions in November, which would be the most in five months, according to the median estimate of 40 analysts surveyed by Bloomberg News. - Bloomberg News