South Africa's rand falls as business confidence weakens

• The rand was 0.12pc weaker at 14.9200 per dollar, extending a 1pc slide in the previous session as selling was spurred by China deciding to halve tariffs on some US goods.
• The South African Chamber of Commerce and Industry's monthly business confidence index slipped to 92.2 in January from 93.1 in December.
• Bonds were also weaker, with the yield on the benchmark 2026 paper up 1.5 basis points to 7.925pc.

JOHANNESBURG: South Africa's rand weakened early on Friday, dragged lower by a bounce in the dollar and data that showed business confidence in the country fell, underlining the struggles faced by the local economy.

At 0630 GMT the rand was 0.12pc weaker at 14.9200 per dollar, extending a 1pc slide in the previous session as selling was spurred by China deciding to halve tariffs on some US goods.

The rand had a torrid January, losing around 8pc to the greenback as fears of the impact on global growth from the coronavirus outbreak triggered heavy selloff of emerging market assets.

The resumption of nationwide power cuts by state firm Eskom last week rattled the last remaining rand bulls, with a slide in business confidence index on Thursday further encouragement for investors to sell the currency.

The South African Chamber of Commerce and Industry's monthly business confidence index slipped to 92.2 in January from 93.1 in December.

"Technically, yesterday's move on the USD-ZAR raises the real possibility of a move back toward the 15.000/$ handle, with a bull flag evolving," analysts at ETM wrote in a note.

So, expect more gains for the pair in the near term, especially if today's non-farm payrolls data comes out strong."

Bonds were also weaker, with the yield on the benchmark 2026 paper up 1.5 basis points to 7.925pc.