Rand falls victim to dollar strength
The rand was relatively weaker on Friday morning, caving in to pressure from external drivers, notably a strong dollar.
The relatively perkier greenback coincided with higher US government bond yields, signalling the prospect of higher interest rates.
The yield on benchmark US 10-year note hovered at 2.9132% in early trade, its highest level since February 21, according to Iress data. The yield on the two-year paper steadied at 2.4283%, levels last visited in 2008.
"The continual pick-up in the US bond yields could put emerging-market currencies on the back foot, but that traditional link has lately not been as pronounced as before," ETM Analytics market analyst Halen Bothma said.
The US and UK feature among developed economies expected to further raise interest rates in 2018. Still, policy tightening in those countries was likely to be shallower, given relatively low inflation pressures.
So far, the rand has been able to handle the current tightening cycle in developed economies with ease, shielded in part by the improving domestic economic outlook.
Markets are likely to keep tabs on the scheduled meeting of the world’s top oil producing nations, starting on Friday, amid elevated oil prices. Members of oil cartel Opec and nonmembers are meeting in Saudi Arabia, where they are expected to review the 2016 deal to cut down oil supplies to boost the prices.
Brent crude was at $73.58 per barrel, near its highest point since late 2014.
At 10am, the rand was at R12.0124 to the dollar from R11.9579, R14.8078 to the euro from R14.7639 and at R16.8696 to the pound from R16.8408.
The euro was at $1.2326, from $1.2345.