Rand slumps as China woes weigh

Johannesburg - The rand crumbled to a new record low against the dollar on Tuesday while yields on bonds rose sharply as concerns about China's economy sank commodity-linked currencies.

The local bourse opened on the back foot as Asian shares hit three-and-a-half year lows on jitters about Chinese growth, with the Top 40 index down 0.75% at 09:10.

Yields on government bonds were higher, tracking the weaker currency, with the benchmark 2026 issue adding 10 basis points to an 18 month high of 8.66%.

"Liquidity remains very thin with local real money mostly on the side-lines while fast money dominates flows," currency traders at Nedbank said in a note to clients.

By 09:00 the rand had slipped 0.32% to R14.1150/$, having shed more than 1% in the previous session to a fresh record low of 14.1300, with scope for more losses as uncertainty over the timing of an interest hike in the United States stoked volatility.

"The rand is simply suffering from being hit by both risk aversion towards high-yield currencies and the fall in commodity prices," said John Cairns, a currency strategist at RMB.

Worries about the health of the Chinese economy triggered a sharp selloff of emerging markets after industrial firms suffered their biggest profit drop in four years, rattling investor confidence in commodity-linked assets.

"While China got the blame overnight, global focus is still primarily on the Fed," Cairns added.

Bets on when the US Federal Reserve will raise rates continued to oscillate after conflicting comments by influential members of the bank clouded market certainty of a 2015 rate lift-off.

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Rand - Dollar
16.18
+2.5%
Rand - Pound
19.82
+1.1%
Rand - Euro
16.70
+1.5%
Rand - Aus dollar
11.48
+0.6%
Rand - Yen
0.12
+0.6%
Gold
1,797.24
+0.2%
Silver
20.75
+1.1%
Palladium
2,250.95
+1.3%
Platinum
949.89
+1.3%
Brent Crude
96.31
-0.4%
Top 40
63,161
-1.0%
All Share
69,745
-0.7%
Resource 10
64,485
-0.9%
Industrial 25
84,636
-1.4%
Financial 15
15,760
+0.1%
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