Johannesburg - South Africa's rand extended losses against the US dollar on Monday, tumbling towards fresh three-week lows after weaker exports widened the trade deficit and underscored the growing fragility of Africa's most advanced economy.
The local unit slipped 0.5 percent to 11.1150 by 06h36 GMT after ending softer on Friday, with scope for further declines seen coming from dollar strength against a poor global economic backdrop.
The dollar traded on the front foot against most major currencies, boosted by a fall in the gold price and a continued decline among commodity-backed currencies.
South Africa's trade account yawned sharply to R21.33 billion ($1.9 billion) in October as imports soared by 17.8 percent, the deficit jumping to a cumulative R95.11 billion for 2014.
“The significant deficits again underscore South Africa's weak economic fundamentals,” Christie Viljoen, an analyst at NKC Independent Economist, said in a market note.
“Disparity between inflows and outflows translates into weaker demand for the rand.”
Government bonds were also weaker in early trade, with the yield on the benchmark government paper due in 2026 up 2.5 basis points to 7.635 percent.
South Africa's November new car sales data are due at 09h00 GMT. - Reuters