South Africa’s rand got off to a weak start against a firmer U.S. dollar on Monday, with investors awaiting a raft of local and global data this week.
At 0615 GMT, the rand traded at 14.5200 against the dollar, 0.24% weaker than its close on Friday, when it suffered losses of more than 1%.
“Those (Friday) losses breached the technical resistance levels on the top side, with this scenario suggesting potential further weakness for the local unit as the U.S. dollar recovered across the board. Although, activity could be limited today, as the UK is on holiday,” analysts at Nedbank said in a note.
The rand lost momentum as investors worried about local economic growth and the duration of expansionary fiscal and monetary policies in developed economies that have so far supported flows into the currency and a healthy trade surplus.
A raft of U.S. economic data this week, including the ISM manufacturing survey and April payroll numbers, is eyed by investors for further cues about recovery in the world’s largest economy.
On the domestic front, manufacturing survey, new vehicle sales and reserves data due this week are expected to provide some insights into the health of the local economy.
Government bonds also weakened in early deals, with the yield on the instrument due in 2030 up 1.5 basis points to 9.305%.