South Africa’s rand edges lower on China-linked risk aversion

23 Aug, 2015 - 00:08 0 Views

The Sunday News

JOHANNESBURG — South Africa’s rand inched lower against the dollar on Friday, following many other emerging markets, with global sentiment hit by China’s deteriorating growth prospects. The rand ploughed a new low against the pound sterling of 20.4070, while visiting its weakest level in 13 months versus the euro at 14.6837, as investors kept avoiding emerging market currencies.

By 1519 GMT, the rand was at 12,9340 versus the dollar, down 0,02 percent from Thursday’s close.
“Global risk sentiment is quite weak at this stage and this is triggered by how emerging markets have been performing in recent sessions and we still see risks to the dollar rand being skewed to the top side,” said Jana van Deventer, a market analyst at ETM Analytics.

Emerging market currencies took no rest on Friday from daily blows coming out of China as disappointing factory data clobbered many markets, sending currencies to new lows.
Chinese manufacturing activity shrank at its fastest pace in 6½ years in August, compounding investor concerns over slowing growth in the world’s No. 2 economy and its potential impact on global growth.

The rand seesawed, a move traders attributed to some support after the currency briefly touched a psychological level against the dollar the previous day.
“The rand has fallen off quite significantly and it might just be some consolidation into the weekend. It’s unlikely that the rand will continue to retain some form of resilience,” said van Deventer.

The rand was likely to remain vulnerable, traders said, with GDP data due next week likely to provide enough evidence that growth in the second quarter was even weaker than expected.

Yields on government bonds were mixed. The yield for the 2026 benchmark was flat to 8,325 percent. — Reuters

 

Share This:

Survey


We value your opinion! Take a moment to complete our survey

This will close in 20 seconds