The rand weakened by one percent on Tuesday morning compared with Monday’s close on the JSE and is approaching R15 to the dollar from R13.50 at the beginning of June.
This, as the dollar continues to strengthen, which usually weakens the rand.
The dollar’s strength can be attributed to disappointing Chinese factory output and retail sales data, which is also contributing to a weaker rand.
China is one of South Africa’s largest trading partners, and South African assets are correlated to swings in sentiment on international markets.
To add to this, South Africa’s government bonds are weakening, as is reflected in a rise in yields, which points to an outflow of dollars, further weakening the rand.
The rand is trading at R14.95 in early trade on the JSE.
