South African rand weakens as dollar rallies on risk sentiment

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South Africa’s rand weakened in early trade on Friday, in line with other emerging market currencies as the US dollar gained on global risk sentiment.

At 0745 GMT, the rand traded at 18.9700 against the dollar , about 0.7% weaker than its previous close.

The dollar was up almost 0.3% against a basket of global currencies, and set for a second week of gains.

“The dollar reversed all of Wednesday’s post-FOMC losses yesterday after the Swiss National Bank surprised markets by cutting its benchmark rate by 25 basis points, and US economic data surprised to the top side,” said Andre Cilliers, Currency Strategist at TreasuryONE.

There was further support for the dollar from a dovish Bank of England outlook, he said in a research note.

Trade was expected to be thin on Friday, since Thursday was a public holiday in South Africa. There were no economic data releases due.

On the stock market, the Top-40, opens new tab index was up 0.86% while the broader all-share, opens new tab was up 0.82% in early trade.

South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 1 basis point to 10.435%.

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