Johannesburg - South Africa's rand hit fresh seven-month lows against a rallying dollar on Friday, and was the worst performer in a basket of emerging market currencies as a weak domestic economy compounded its weakness.
The dollar has been buoyed by some expectations that the US Federal Reserve may signal an earlier-than-expected rise in interest rates at a policy meeting next week.
The rand is also dogged by weak economic indicators released this week, ranging from a gaping current account deficit and manufacturing production at a five-year low.
South Africa's currency was down at 10.9900 to the dollar at 08:44 SA time.
It earlier broke through the psychologically key 11 level for the second time this week and hit 11.0225, its weakest since February 21.
“A move to the next (dollar) resistance around 11.0950 and then 11.12/13 could develop rapidly. It is the end of a volatile week though, so there may be some position squaring,” said Oliver Alwar, a currency trader at Standard Bank in Johannesburg.
Yields on government bonds were flat at 8.235 percent on the benchmark 2026 issue, waiting for further impetus after testing three-week highs earlier this week.
The National Treasury is issuing 800 million rand in 2038, 2050 and 2025 bonds linked to the consumer price index.
Traders expect the offer of the long-dated 2050 issue will return some demand in the paper after the weekly auction was undersubscribed last week.
Results are due after the auction closes at 11:00 SA time. - Reuters