South Africa`s rand weaker as risk-on trade loses momentum

Published: 2021-03-08 tag: middle east and africa

South Africa`s rand fell slightly in early trade on Monday, as the dollar hovered near three-month highs after the U.S. Senate cleared a bumper stimulus bill, sparking a sell-off in the global bond market.

JOHANNESBURG (Reuters) - South Africa’s rand fell slightly in early trade on Monday, as the dollar hovered near three-month highs after the U.S. Senate cleared a bumper stimulus bill, sparking a sell-off in the global bond market.

At 0620 GMT, the rand traded at 15.3600 against the dollar, compared with a close of 15.3525 on Friday when it hit its lowest in nearly two months.

Emerging currencies came under pressure as the dollar firmed on the back of stronger-than-expected U.S. jobs data and the pandemic relief bill. [EMRG/FRX]

The U.S. Senate passed the COVID-19 relief plan on Saturday and U.S. President Joe Biden said he hoped for a quick passage of the revised bill by the House of Representatives.

The rand also tracked a pullback in currencies of major commodity exporters as a broader risk-on trade lost momentum.

“The rand lost ground steadily over the course of last week; on Friday, it breached above the short-term technical resistance around the 15.3500 level,” analysts at Nedbank said in a note.

“The next objective on the top side is now around 15.6500. Emerging markets across the board are on the back foot, as the U.S. approved its stimulus bill.”

Government bonds were also weaker in early deals, with the yield on the instrument due in 2030 up 4 basis points to 9.360%.

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