JOHANNESBURG: South Africa's rand weakened early on Thursday, pressured by an expected hawkish tone at the local central bank's policy meeting after a sharp increase in consumer prices.
At 0640 GMT the rand was 0.56 percent weaker at 12.5300 per dollar, giving up gains from the previous session that saw the currency trade as firm as 12.4100, its best in a week.
The rand had found some reprieve after US President Donald Trump's announcement of possible new trade tariffs on automobile imports weakened the dollar, but that support faded quickly as worries over Turkey dimmed risk demand globally.
A 300 basis point interest rate hike by the Turkish central bank late on Wednesday hardly stemmed the lira's freefall after some initial gains, leading to continued pressure on emerging market currencies generally as risk sentiment sunk.
Data on Wednesday showed local consumer price inflation in April rose sharply, prompting markets to increase bets the Reserve Bank would strike a hawkish tone when it decides on lending rates this afternoon.
A Reuters poll last week unanimously found the bank would keep rates on hold at 6.5 percent.
Bonds were firmer in early trade, with the yield on the benchmark paper due in 2026 5 basis points lower at 8.47 percent.
The stock market opened firmer with the Johannesburg Stock Exchange's Top-40 index up 0.33 percent at 50,764 points.
Comments
Comments are closed.