Friday, 21 August 2015 12:28
JOHANNESBURG: South Africa’s rand traded within striking distance of the previous day’s 14-year low against the dollar on Friday, weighed down like other commodity currencies by signs of slowing growth in China.
The local unit ploughed a new record low against pound sterling, while visiting its weakest level in eight months versus the euro, in largely risk averse trading conditions.
By 0642 GMT, the rand was at 12.9535 versus the dollar, down 0.18 percent from Thursday’s close.
It hit a session low of 14.6502 against the euro its weakest since mid-December last year, and fell to a new all time low of 20.4070 to the pound.
The rand had earlier drifted lower to 12.9870/dollar, very close to the previous day’s trough of 13.0050, which was its weakest level since Dec. 2001.
“Fears over the state of the Chinese economy hit global markets hard overnight and pressures will continue into today after the release of a very weak China Markit PMI figure,” RMB analyst John Cairns said.
“The silver lining is that Fed hikes may have to be postponed,” he added, referring to receding expectations that the US Federal Reserve will start raising interest rates as early as September.
Expectations of imminent policy tightening in the world’s biggest economy have drawn investment away from high-yielding emerging currencies. This has helped weaken the rand 12 percent against the dollar so far this year.
Government bonds were a tad softer in early trading, with the yield for the 2026 benchmark adding one basis points to 8.285 percent.
