South Africa's rand weakened on Monday as falling imports in China dragged emerging currencies lower despite broad market relief over Greece's truce with its creditors. By 1515 GMT the rand had slipped 0.12 percent to 12.4655 against the dollar, losing ground gained after Greece struck the eleventh-hour agreement with international lenders that keeps the Mediterranean country in the euro.
The rand briefly rode the wave of relief to a session high of 12.3860 in early trade but soon buckled, as major South Africa export destination China reported second-quarter imports down 6.1 percent year on year. "The big risk will obviously be Q2 GDP data. Any indication that the growth rate is coming below 7 percent will reignite worries over China's growth," said Ricardo Da Camara of ETM Analytics.
US Federal Reserve chair Janet Yellen said on Friday that a rise in US interest rates remains likely this year, sparking a rally that lifted the dollar index by 0.7 percent. Yellen's testimony to US Congress later in the week will be watched closely for a further steer on a rate rise, which could pose significant risk to the rand, Da Camara said. Government bonds were subdued, with the benchmark issue due in 2026 adding 1 basis point to 8.22 percent.