The rand weakened in early trade on Thursday, as the US dollar held near recent peaks after traders increased bets that the US Federal Reserve will become even more aggressive next week in its battle to curb inflation.
At 0712 GMT, the rand traded at 17.50 against the dollar, 0.11% weaker than its previous close.
The U.S. dollar index, which measures the greenback against a basket of currencies, was up 0.255% at 109.88, not far off its two-decade peak of 110.79. Read full story
Economists at ETM Analytics said in a research note that the Fed will likely remain extremely aggressive until data shows a few consecutive months of falling core inflation and signs of a loosening labour market.
Therefore, they added, emerging-market currencies will struggle for traction, with the rand’s value against the dollar poised to test recent highs around 17.55 in the sessions ahead.
On the stock market, the Top-40 index was up 0.47% while the broader all-share rose 0.37% in early trade.
The government’s benchmark 2030 bond ZAR2030= was almost unchanged in early deals, with the yield at 10.330%.