JOHANNESBURG: South Africa's rand extended its losses against a surging dollar on Monday after the US Federal Reserve Chair Janet Yellen signalled the central bank was poised to raise rates this year.
At 1435 GMT the rand was 0.57 percent weaker at 11.9605 to the dollar from its closing level on Friday.
"Late on Friday we obviously saw the dollar strengthen significantly because of Yellen's comments and that is why the rand lost out," said Ion de Vleeschauwer, a currency dealer at Bidvest Bank. He added that trading volumes were thin as several markets including the United Kingdom and the United States were shut for holidays.
"The whole financial world is out of action today, it's really been dull trading."
The dollar hit a one-month high against a basket of major currencies on Monday after stronger-than-expected underlying US inflation bolstered the Federal Reserve's case for an interest rate hike later this year.
Yellen's comments that the central bank was poised to raise rates in 2015 also shored up sentiment towards the dollar, traders said.
Locally, traders were waiting for unemployment and GDP data due on Tuesday, followed by producer inflation, budget, trade balance and a fuel price decision later in the week.
Government bonds weakened with the currency, and the yield for the 2026 benchmark was up 7 basis points to 8,120 percent.
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