South Africa's rand slid against the dollar on Friday as weaker-than-expected Chinese gross domestic product data hit emerging market sentiment, while bonds were flat after a holiday-shortened week. From being the strongest performer against the dollar among 20 emerging market currencies on Thursday, the rand was third from bottom on Friday as investors spooked by renewed global growth worries fled to safe-haven assets.
The rand fell more than 1 percent to a trough of 7.9510/dollar before coming back slightly to 7.94 by 1602 GMT, down 0.95 percent on the day. "When that Chinese GDP data came out and it was softer than markets expected we saw quite a fair bounce higher on dollar/rand. Pretty much through the day it's been the rand's reaction to how the offshore market has factored that data," said Sean McCalgan, a market analyst at ETM. Thirty percent of South African exports are to Asia, making the rand especially vulnerable to signs of weakening in the Chinese economy.
Global economic uncertainty is set to keep the rand trading in a narrow range over the next 12 months, although the prospect of rising interest rates could lend some support to the currency, a monthly Reuters poll showed last week. The yield on the three-year benchmark inched up just two basis points to 6.72 percent while that for the 15-year issue was down 1.5 basis points at 8.44 percent.
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