The rand fell on Monday, ahead of a policy-focused week in which the US Federal Reserve and the Bank of England (BoE) are expected to raise interest rates to tame inflation.
At 8.34am, the rand traded at R16.03 against the dollar, down 1.01% from its previous close, its lowest in almost four weeks.
The dollar index, which measures the greenback against a basket of six major peers, was up slightly at 104.5, as hot May US inflation data on Friday drove up treasury yields.
“Emerging market currencies are vulnerable at the start of the week as US treasury yields rise and equities tumble. The ZAR will not escape this sentiment,” ETM Analytics said in a research note.
The rand is set to take its cues from global markets in what is a relatively quiet week on the domestic data front.
The focus will be on central banks’ efforts, with the Fed and the BoE expected to raise rates. While there is a chance the Swiss National Bank will also hike, little change is expected from the Bank of Japan.
The government’s benchmark 2030 bond was lower in early deals, with the yield up 13 basis points to 10.335%. — Bhargav Acharya, (c) 2022 Reuters