South Africa’s rand opened half a percent lower on Monday as demand for emerging market currencies weakened, with investors buying dollars on expectations the Federal Reserve will keep raising interest rates and amid lingering fears of a global trade war.
At 0630 GMT the rand was 0.51 percent weaker at 14.7600 per dollar compared with a close of 14.6900 in New York on Friday, having touched a month’s low of 14.8000 overnight.
The rand has buckled alongside other emerging market currencies as risk aversion gripped emerging markets following financial crises in Argentina and Turkey last week, adding to the pressure of higher rates in the U.S. that have boosted dollar demand.
With a slew of local data due in the week expected to show the South African economy remained weak in the second quarter, traders said the rand was unlikely to strengthen.
Later on Monday, ABSA publishes its monthly manufacturers’survey followed by August vehicle sales figures.
On Tuesday Statistics SA releases second-quarter economic growth data and the current account figures are out on Thursday.
Bonds were also weaker, with the yield on the benchmark government debt due in 2026 up 3 basis points to 9.01 percent.
Stocks were set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down 0.5 percent.