JOHANNESBURG: South Africa's rand fell against the dollar on Thursday on softening precious metal prices, erasing modest gains made earlier in the week.
The rand was at 9.0425 to the dollar at 0632 GMT, 0.8 percent weaker than its close in New York on Tuesday. The market was closed on Wednesday for a public holiday.
Data released on Tuesday showing a narrower-than-expected trade deficit in March bolstered the rand but a fall in commodities prices put it on the back foot.
Gold, crude oil and other commodities fell sharply on Wednesday after data showed a surprise drop in Chinese manufacturing orders in April and a slowdown in US manufacturing growth, reviving fears over the health of the global economy.
On Thursday, gold fell $3.05 an ounce to $1,453.69, near its weakest level in almost a week.
South Africa's weak economic fundamentals, including a current account and trade deficit, are likely to continue to weigh on the rand, analysts said.
Despite a smaller March trade deficit, the current account deficit for the first quarter will still be large, analysts at Absa Capital wrote in a research note.
"The Q1 deficit is still 10 billion rand larger than in Q3 2012 when the current account deficit hit a peak of 6.8 percent of GDP," they wrote.
"We still argue that the rand remains vulnerable to the country's twin deficits and that over the medium term, participants should continue to fade rand rallies."
Government bonds yields declined, falling 3 basis points on the 2015 paper to 5.18 percent and 1 basis point on the 2026 issue to 6.720 percent.
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