Rand pressured by strong dollar

In early trade the rand was at R15.93 against the dollar, around 0.4% weaker than its previous close.
Image: AdobeStock

The South African rand was under pressure from a strong dollar early on Thursday, as the US currency struck multi-year peaks against a basket of currencies.

At 0705 GMT, the rand traded at R15.93 against the dollar, around 0.4% weaker than its previous close.

The dollar has been bolstered by bets that the Federal Reserve will hike interest rates aggressively this year, starting with a 50 basis point move in May.

The rand lost more than 6% against the greenback last week as severe power cuts by struggling utility Eskom and devastating floods reminded investors of the constraints to South Africa’s growth outlook. It has fallen almost 2% more this week.

Around 0930 GMT on Thursday, Statistics South Africa will release producer inflation data, providing further clues about price pressures. On Friday money supply, budget and trade figures are due.

On the Johannesburg Stock Exchange, the Top-40 index was up 1.2% in early trade. The government’s benchmark 2030 bond dropped slightly, with the yield rising 3.5 basis points to 9.920%.

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