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South African rand hits 3-month low on soaring dollar
(Updates to reflect afternoon trading)
JOHANNESBURG, April 23 (Reuters) - South Africa's rand
slumped to a three-month low on Monday, as emerging market
currencies were pressured by a soaring dollar.
At 1515 GMT the rand was 1.4 percent weaker at
12.2600 against the U.S. currency after hitting its weakest
since Jan. 18 earlier in the day.
Other emerging market currencies such as the Russian rouble
and Brazilian real saw steep losses, as the dollar
rallied to a seven-week high on the back of rising U.S.
Hussein Sayed, chief market strategist at FXTM, said the
rand could soon weaken beyond 12.30 to the dollar.
The sharp move in the rand comes at the end of a relatively
quiet few weeks for the South African currency, which has traded
in a tight range against the dollar.
Warrick Butler, executive head of rand trading at Standard
Bank, said that despite Monday's slump "the overall trading
environment remained cautiously optimistic".
The rand and South African assets surged in the wake of
Cyril Ramaphosa taking the helm of the ruling African National
Congress (ANC) in December. Ramaphosa, who then replaced Jacob
Zuma as head of state in February, has promised to revamp the
economy and woo foreign investors.
"There is still value to be found in our interest rate curve
for foreign index trackers with a real interest rate return of
over 2 percent," Butler said in a note to clients. "The inflow
of foreign capital continues."
Rand-denominated bonds also fell on Monday, with the yield
on the benchmark instrument due in 2026 up 11.5 basis
points to 8.155 percent.
Trading on the bourse was mixed as stocks reacted to the
Financial and retail shares notched up the largest falls,
with FirstRand weakening 3 percent and NedBank
shedding 2.3 percent.
Miners with South African operations such as Anglo American
and Gold Fields fared better, both rising more
than 1 percent. The benchmark Top-40 index ended 0.22
percent higher at 50,877.98, while the wider All-share index
climbed 0.17 percent to 57,679.51.
(Reporting by Alexander Winning and Nomvelo Chalumbira
Editing by Alison Williams)
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