JOHANNESBURG: The South African rand fell on Thursday as analysts rued the weakness of the local currency and markets wait for direction from U.S. employment data on Friday.

At 1140 GMT, the rand traded at 19.5700 against the dollar, over 1% weaker than its previous close.

The dollar last traded around 0.08% weaker against a basket of global currencies.

South African rand falls further before whole-economy PMI

“Given South Africa’s heightened fiscal risks and deteriorating economic fundamentals, the ZAR lacks resilience against the broader ebb and flow of market sentiment,” Danny Greeff, co-head of Africa at ETM Analytics told Reuters.

“The U.S. employment data scheduled for release tomorrow … will likely determine its directionality into the new week,” Greeff said.

The rand has already lost over 3% against the greenback this month and about 13% this year, but central bank Governor Lesetja Kganyago said on Thursday that the bank would not step in to protect the local currency.

“It’s a futile exercise trying to defend the exchange rate,” Kganyago said during a webinar, adding that the rand was caught up in a realignment of global currencies.

Like other risk-sensitive currencies, the rand often takes cues from international factors such as dollar moves and U.S. economic data in the absence of major local data points.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index last traded about 0.6% higher.

South Africa’s benchmark 2030 government bond was stronger, with the yield down 7 basis points to 11.015%.