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JOHANNESBURG. — South Africa’s rand weakened early yesterday, pausing a post-budget rally that saw the currency trade below a key technical mark as demand for emerging-market currencies fuelled by trade optimism cooled.
At 0640 GMT, the rand was 0.29 percent weaker at 13,8650 per dollar, compared to the close of 13.8250 overnight in New York.
The rand has traded below the 14,00 per dollar psychological level for the past few sessions as last Wednesday’s budget lowered market bets of a credit rating cut by Moody’s after a week of electricity blackouts by Eskom had spooked investors.
Demand for the rand and fellow EM currencies in the previous session was boosted by U.S. President Donald Trump’s decision to delay the deadline to increase tariffs on Chinese imports, but it faded as markets held fire on big bets.
“Markets will look towards Federal Reserve Chairman Jerome Powell’s testimony today when he delivers his semi-annual update to reaffirm the Fed’s stance on interest rates as well as anticipated economic conditions,” said Bianca Botes, an analyst with Peregrine Treasury.
Bonds also retreated, with the yield on the benchmark 10-year government issue up 1 basis point at 8,705 percent. — Reuters Africa.
Online Reporter