JOHANNESBURG: South Africa's rand weakened more than 1 percent early on Friday, in line with a rise in bond yields, as investor appetite for riskier assets dimmed ahead of an expected U.S. interest rate hike early next week and fresh worries of a sharp slowdown in the world's second-biggest economy.
* At 0716 GMT, the rand ZAR=D3 was 1.01 percent weaker at 14.3150 per dollar from an overnight close of 14.1725.
* The currency is expected to trade in a range of 14.0500 to 14.3500 to the dollar on Friday, NKC African Economics said in a note.
* The Fed is widely expected to raise interest rates by 25 basis points, its fourth rate hike this year though greater focus will centre on the policy outlook for 2019, over which there is more uncertainty.
* The rand remains under pressure after a strong rally in the dollar in the previous session put the currency on the back foot amid downbeat comments from the European Central Bank president about the outlook for the euro zone and renewed concerns about a hard Brexit.
* China's November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years as domestic demand softened further, underlining rising risks to the economy as Beijing works to defuse a trade dispute with the United States.
* "The markets have traded with little if any conviction over the recent sessions. Locally numerous factors are weighing on the rand, together with the threat of trade wars and a standoff between Europe and the UK. As a result, markets are likely to continue trading cautiously into year-end," Nedbank said in a note.
* Bonds were also weaker in early deals, with the yield on the benchmark 2026 paper ZAR186= up 7 basis points to 9.210 percent.
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