| 9 December 2023, Saturday |

South African rand falls to 4-month low ahead of US employment data

The South African rand hit a four-month low as analysts bemoaned the country’s weak currency and markets awaited Friday’s jobs report from the United States.

The rand was trading at 19.5700 against the dollar at 1505 GMT, down about 1.2% from its previous close.

It reached a low of 19.6325 earlier in the day, its lowest since June.

The dollar last traded around 0.15% weaker against a basket of global currencies.

“Given South Africa’s heightened fiscal risks and deteriorating economic fundamentals, the ZAR lacks resilience against the broader ebb and flow of market sentiment,” Danny Greeff, co-head of Africa at ETM Analytics told Reuters.

“The U.S. employment data scheduled for release tomorrow … will likely determine its directionality into the new week,” Greeff said.

The rand has already lost more than 3% against the greenback this month and about 13% this year, but central bank Governor Lesetja Kganyago said on Thursday that the bank would not step in to protect the local currency.

“It’s a futile exercise trying to defend the exchange rate,” Kganyago said during a webinar, adding that the rand was caught up in a realignment of global currencies.

Like other risk-sensitive currencies, the rand often takes cues from international factors such as dollar moves and U.S. economic data in the absence of major local data points.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed about 1% higher.

South Africa’s benchmark 2030 government bond was stronger, with the yield down 8 basis points to 11.005%.

  • Reuters