Rand weakens as dollar nears 4-month high

(iStock)
(iStock)

Cape Town - The rand fell 1% against the dollar on Wednesday morning, to trade at R12.44 by 10:51, its lowest level since early January. 

The local currency, which has been losing ground all week, opened at R12.35 against the greenback. 

Bianca Botes of Peregrine Treasury Solutions said the dollar was nearing a 4-month high as the yield on 10-year US bonds neared 3%

“Pressure is expected throughout emerging markets as the sell-off of riskier assets continues,” she said. 

Adam Phillips of Umkhulu Consulting said strong economic data for consumer confidence and new home sales released in the US on Tuesday indicated the world’s biggest economy will keep growing in quarters to come.

“[The rand could] stay on the back foot for the rest of the week as US yields rule the thinking in the market,” he said. 

In an early morning note, NKC African Economics estimated that the local currency would likely trade in a range of between R12.25/$ and R12.45/$.

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