JOHANNESBURG: South Africa’s rand weakened in early trade on Thursday as the dollar hit a multi-year high on expectations of high interest rates in the US At 0630 GMT, the rand traded at 17.1800 against the dollar, 0.26% weaker than its previous close.

The greenback hit a 24-year high of 139.69 against the yen in early Asia trade, a gain of about 0.5% on the previous day’s close. It was last up 0.42% at 139.55.

Analysts are expecting that the US Federal Reserve will hike interest rate by 75-basis-point at next month’s meeting on the back of strong local economic data.

This is not only creating pressure on currencies of advanced markets, but forcing investors to flee to the safe haven US from riskier markets such as South Africa.

South African rand firms as inflation accelerates

The local currency has lost almost 16% against the dollar in the last five months from its peak of 14.4651 rand against the dollar at the start of April.

The weakening has also been led by cooling off in commodity prices.

The government’s benchmark 2030 bond was down in early deals, with the yield up 12 basis points to 10.560%.