JOHANNESBURG: The South African rand lost more ground in early trade on Wednesday against a rising dollar, ahead of a whole-economy purchasing managers’ index (PMI) survey about Africa’s most industrialised economy.
At 0646 GMT, the rand traded at 19.4000 against the dollar, about 0.4% weaker than its previous close.
The dollar last traded around 0.1% stronger against a basket of global currencies.
The rand has been on a downward trajectory this week, tumbling against a buoyant dollar on both Monday and Tuesday to sit nearly 2.4% weaker since the start of the month.
“The rand continues to feel the pressure from the strong dollar and general risk aversion driven by the rate hike fears,” said Andre Cilliers, currency strategist at TreasuryONE, adding that markets are on the fence about whether the U.S. Federal Reserve will hike interest rates again this year.
“Bets that the (South African Reserve Bank) will have to hike further are on the rise, and (this month’s) big hike in the petrol price is likely to raise inflation fears.”
The whole-economy PMI for September is due to be released at 0715 GMT.
South Africa’s benchmark 2030 government bond was weaker in early deals, the yield up 5 basis points to 11.070%.
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