PRETORIA – South Africa’s currency firmed to back below the crucial 12 rand per dollar mark on Monday, with some traders anticipating the unit would reverse a run of three consecutive sessions of losses as the dollar struggled to shake off U.S.-China trade tensions.
At 0630 GMT the rand was 0.33 percent firmer at 11.9800 per dollar compared to close of 12.0200 on Friday in New York.
The rand slipped to its weakest since March 19 last week, and threatened to touch a 2-month low, with a wave of selling hitting most emerging market currencies as the stand-off over import tariffs between the world’s two largest economies escalated.
The souring of investor sentiment about global growth, combined with rising lending rates by the Federal Reserve and technical indicators suggesting the rand’s “Ramaphosa rally” had run its course prompted traders to trigger defensive positions.
The rand however found support from a soft greenback, turning away from support around 12.0260, although traders said the recovery was unlikely to last with EM sentiment still bearish overall.
The yield for the benchmark government bond was down 1.5 basis points to 8.04 percent.