Rand under pressure in early trade

Picture: Siphiwe Sibeko

Picture: Siphiwe Sibeko

Published Nov 23, 2015

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Johannesburg - South Africa's rand snapped a five-day winning streak against the dollar on Monday, reflecting renewed concerns about the impact US interest rate hikes could have on emerging markets.

The JSE securities exchange's Top 40 futures index was down 0.4 percent, pointing to a slightly weak start for the local bourse at 07h00 GMT.

Government bonds also retreated, with the yield on the benchmark government bond maturing in 2026 adding 3.5 basis points to 8.45 percent.

At 06h46 GMT, the rand traded at 14.0125 against the dollar, down 0.45 percent from Friday's close at 13.9500.

The rand had climbed to 13.8900 late last week, its strongest since November 6, after the central bank raised the benchmark repo rate by 25 basis to curb inflation pressures.

The central bank move may not be enough to cushion the rand, which has weakened nearly 18 percent this year as part of an emerging market sell-off prompted by expectations that the US will start raising interest rates soon.

“The probability of a rate hike by the Fed has risen since last week,” Standard Bank said in a note.

REUTERS

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