JOHANNESBURG: The South African rand weakened in early trade on Tuesday as the US dollar rose, ahead of a leading business cycle indicator release and other economic data points later in the week.
At 0634 GMT, the rand traded at 18.8950 against the dollar , almost 0.7% weaker than its previous close.
The dollar last traded around 0.15% stronger against a basket of global currencies.
At 0700 GMT the South African Reserve Bank will release the country’s leading business cycle indicator for July and at around 0900 GMT the government will hold its weekly government bond auction.
South Africa will also release producer price inflation, money supply, trade balance and budget figures for August this week, which will give clues on the health of the economy.
“While the rand has been doing very well, there is no point in fighting against a stronger USD,” said Rand Merchant Bank (RMB) analysts in a research note.
The dollar has surged following comments by the Federal Reserve that suggested it might keep interest rates higher for longer, RMB added.
Like other risk-sensitive currencies, the rand is often swayed by global factors like US monetary policy.
South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 9 basis points to 10.745%.