JOHANNESBURG: South Africa's rand weakened in early trade on Monday and was expected to be volatile as the dollar recovered and investors digested news that S&P Global Ratings had affirmed the country's investment-grade credit rating.
At 0700 GMT, the currency of Africa's most industrialised economy traded at 15.1500 versus the dollar, 0.33 percent weaker from its New York close on Friday.
The rand hit 15.0600 on Friday, its strongest level since May 13, also helped by weak U.S. jobs data that quashed expectations for a near-term U.S. interest rate hike.
"The extremely weak payrolls data accounted for around 60 percent of Friday's rand gains; S&P's decision the remainder," Rand Merchant Bank analyst John Cairns said in a note.
"Bias is to the topside as dollar losses reverse but expect ongoing volatile trade in response to Friday's events."
S&P left its BBB- rating on South Africa but warned that its negative outlook reflected the potential adverse consequences of low GDP growth.
The dollar index, which tracks the greenback against a basket of six major currencies, added 0.24 percent to 94.251.
Government bonds firmed, with the yield for the benchmark instrument due in 2026 down 10 basis points to 9.1 percent.
Comments
Comments are closed for this article.