Rand hits four week low against the dollar
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Rand touched a four-week low against the dollar early on Thursday, with risk appetite subdued after the US Federal Reserve unexpectedly brought forward its projections for interest rate hikes into 2023.
The rand fell to 14.0387 against the dollar, its weakest since May 20.
Government bonds also weakened, with the yield on the benchmark 2030 instrument jumping 14.5 basis points to 8.945 percent.
The Fed on Wednesday began closing the door on its pandemic-driven monetary policy as officials projected an accelerated timetable for interest-rate increases, opened talks on how to end crisis-era bond-buying, and said the 15-month-old health emergency was no longer a core constraint on US commerce.
Riskier currencies, such as the rand, thrive on US interest rates remaining low because they benefit from the interest rate differential that increases their appeal for carry trade.
"After the market digests recent news we may see a correction lower," said Warren Venketas, analyst at DailyFX.
With the local economy remaining weak, the rand's recent rally has been mainly on the back of global factors, including higher commodity prices which benefit resource-rich South Africa and expectations US lending rates will stay lower for longer.