JOHANNESBURG: South Africa’s rand fell more than two percent against the dollar on Tuesday, hurt by a greenback which drew strength from rising US bond yields, while stocks ended lower.
At 1504 GMT, the rand traded at 12.6000 per dollar, 2.17 percent weaker than its close on Monday.
Many emerging market currencies took a hit as US Treasury yields again traded above the psychological 3 percent level, supporting the dollar which strengthened for a second straight session.
“We have definitely seen a sharp reversal on the dollar which has gained against a broad basket of currencies from both emerging and developed economies,” IG South Africa senior market analyst Shaun Murison said.
“The rand, after clawing back some strength over the past few days is renewing weakness against the greenback with the short term high at R12.75/$ the next obvious upside target, a break of which suggests R13/$ the next round number target.”
The South African currency has been led by external factors in recent weeks, but Tuesday’s weakness also came as data showed the unemployment remained at a stubbornly high rate of 26.7 percent in the first quarter.
Government bonds also weakened, with the yield on the benchmark instrument due in 2026 jumping 15 basis points to 8.49 percent.
Stocks ended the day lower, with the Johannesburg All-Share index down 1.23 percent at 57,891 points and the Top-40 index falling 1.28 percent at 51,333 points.
Source: Brecorder
