South African rand weaker in early trade on China virus scare

JOHANNESBURG – The South African rand was weaker early on Thursday, in line with other emerging market currencies as traders kept a wary eye on the spread of a new flu-like virus in China that has raised fears of a global pandemic.

At 0630 GMT, the rand traded at 14.3650 versus the dollar, around 0.3% lower than its previous close.

The rand’s losses ate into some of the gains made on Wednesday, when demand for riskier assets had rebounded.

Without any major local data releases due on Thursday, the rand is expected to reflect trends on global markets, where concerns over the coronavirus boosted safe-haven currencies.

Some investors use the rand as a proxy for emerging market risk, so it tends to fluctuate more than other units.

Local factors driving investor sentiment in recent days include the weak outlook for the domestic economy, after the International Monetary Fund and South African Reserve Bank downgraded their growth predictions.

Government bonds were slightly stronger early on Thursday, with the yield on the benchmark 2026 bond down 3 basis points to 8.105%. – Reuters Africa