South Africa's rand falls as risk-off sentiment lifts dollar
- The rand traded at 15.3200 against the dollar, 0.29% weaker than its previous close.
- "Concerns surrounding stock over-valuations saw hedge funds reduce long positions, which triggered a bigger sell-off."
JOHANNESBURG: South Africa's rand fell in early trade on Thursday, as investors flocked to the safety of the dollar following an overnight Wall Street sell-off, after the US Federal Reserve flagged a slowdown in the pace of economic recovery.
At 0625 GMT, the rand traded at 15.3200 against the dollar, 0.29% weaker than its previous close.
"Risk sentiment in markets turned negative as major stock markets suffered big losses yesterday, and investors turned to the dollar for safety," said Andre Cilliers, currency risk strategist at TreasuryONE in Pretoria.
"Concerns surrounding stock over-valuations saw hedge funds reduce long positions, which triggered a bigger sell-off."
Wall Street suffered its biggest one-day percentage drop in three months overnight, with declines accelerated in the wake of the policy statement from the US Federal Reserve.
The Fed flagged a worrying slowdown in the pace of recovery of the world's top economy, pledging continued support until a full economic rebound is in place.
In fixed income, the long-dated benchmark bond due in 2030 was up 0.5 basis point to 8.760% in early trade.
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