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Rand weakens as Ukraine tension simmers

Johannesburg - The rand weakened against the dollar on Friday as tensions in Ukraine soured global risk sentiment and as investors looked ahead to the release of trade deficit data later in the session.

The local unit slipped to 10.6475 per dollar by 08:33 SA time, 0.26 percent weaker than its New York close of 10.6200.

Data on Friday showed that credit demand for July inched up to 9.77 percent, beating a forecast for an increase of 9.0 percent.

The domestic trade deficit for July is expected to widen to 3.2 billion rand from a lower-than-expected 19 million rand in June, dragged wider by a slow down in demand from major export destinations China and the euro zone.

The local currency was under pressure from conflict overseas, as news that Russian forces had been spotted inside Ukraine soured global risk sentiment.

“News of heightened military tensions in the Ukraine have sparked a pullback in risk exposure,” ETM Analytics said in a morning note to clients.

Government bonds firmed in morning trade, with paper due in 2015 shedding 4 basis points to 6.6 percent and the longer-dated 2026 issue cutting 3 basis points to 8 percent. - Reuters

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