Independent Online

Wednesday, August 17, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

South African rand slips as dollar holds firm

An employee counts mixed denomination rand currency notes at the Forex department inside a First National Bank (FNB) branch in Johannesburg, South Africa. Photographer, Nadine Hutton, Bloomberg.

An employee counts mixed denomination rand currency notes at the Forex department inside a First National Bank (FNB) branch in Johannesburg, South Africa. Photographer, Nadine Hutton, Bloomberg.

Published Jul 11, 2022

Share

South Africa's rand weakened in early trade on Monday, resuming its downward trend from the week before, as the safe-haven dollar strengthened amid global growth fears.

At 08:32 am, the rand traded at 16.9400 against the dollar, down 0.19% from its previous close.

Story continues below Advertisement

The rand was within a touching distance of hitting 17.000 on Monday, after trading at 16.9975 earlier, a level unseen since September 2020.

The dollar index, which measures the currency against six counterparts, was up 0.32% and last trading at 107.42. The currency surged to a 24-year high on the yen in morning trade.

The rand was battered last week and hit multiple lows as investors sought the safety of the U.S. dollar at a time of high economic uncertainty as fears over a looming global recession grow.

"Mounting global growth fears are also supporting the safe-haven USD this morning. Emerging market FX is also broadly negative ahead of the European open, with the ZAR leading the decline," ETM Analytics said in a research note.

Investors' eyes will be on U.S. CPI data due Wednesday and markets would likely interpret a high reading as a sign the U.S. Federal Reserve would need to raise rates even more aggressively to combat inflation.

The government's benchmark 2030 bond was flat in early deals, with the yield at 10.620%.

Story continues below Advertisement

Reuters

Share