At 5pm, the rand bid at R11.9127 to the dollar, 14.91 cents softer than at the same time on Wednesday, its softest level since February14, compared to an overnight close of R11.7875.
It was the first time in more than two weeks the rand closed above technical support around R11.80, bringing losses since Monday to 3percent, prompting some technical selling as well as portfolio rebalancing by corporates offloading excess rands.
Analysts said the “Ramaphosa effect”, named for the rise in investor confidence and rally in local assets after new president Cyril Ramaphosa took over as chief of the ANC in December, was now giving way to global headwinds.
Signs the US Federal Reserve may raise interest rates as many as four times as its economy speeds up, and a slack in demand from China, has seen emerging market currencies suffer.
“Investors are now moving into dollar-denominated assets on the back of the stronger US dollar,” said analyst at Peregrine Treasury Solutions, Bianca Botes
“We are also seeing an element of fear in the markets as investors are positioning themselves for a risk-off environment by moving out of riskier emerging market assets,” Botes said.
Local economic data was mixed. The Absa purchasing manager’s index showed the private sector rise to its best in 10 months, but year-on-year new vehicles fell for a third consecutive month.
Bonds were also softer, with the yield on the benchmark paper due in 2026 up 0.5 basis points to 8.13percent.
In the equities market, the all share index closed 0.69percent down to 57923.16 points, while the blue chip JSE Top40 index dropped 0.72percent to 51011.02 points.
Leading the decliners, retailer Steinhoff International Holdings, hit a one-week low after reporting a 5percent fall in quarterly revenue after market close on Wednesday and said working capital “dried up”.
Steinhoff closed 12.07percent down to R5.10.