JOHANNESBURG: South Africa’s rand weakened 1% against the US dollar on Friday as concerns about global economic growth weighed on risk sentiment.
At 1241 GMT, the rand traded at 18.7150 against the dollar , 1% weaker than its previous close.
Hawkish comments from global central banks, including the US Federal Reserve, stoked fears that their aggressive monetary tightening could push economies into a deeper downturn.
The safe-haven dollar was buoyed by the comments and was last trading up 0.48% at 102.870 against a basket of six currencies.
“The risk aversion deepened on Friday as recession fears grow in Europe following the publication of much weaker-than-expected PMI data from the Eurozone and UK,” said Fawad Razaqzada, market analyst at StoneX, in a research note.
“We have seen global equities, crude oil and some emerging market currencies… selling off, while the US dollar has rallied against most major currencies,” he added.
The risk-sensitive rand, like most emerging market currencies, often takes cues from global drivers such as US monetary policy and the dollar in the absence of local economic data points.
South African rand little changed as leading indicator due
On the Johannesburg stock market, both the Top-40 index and the broader all-share were down about 1.5% on the day, both having lost around 5% since the start of the week.
South Africa’s benchmark 2030 government bond was last trading weaker, with the yield up 3 basis points to 10.720%.
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