The rand wilted on Tuesday morning as the narrative of rising US government bond yields and a strong dollar played out again, bringing pressure to bear on other currencies. Over the past 24 hours, the local currency has shed about 20c against the dollar, as the yield on the benchmark US 10-year paper crossed the psychological 3% level, boosting the value of the dollar. But ETM Analytics market analyst Halen Bothma said the resultant weakness in emerging-market currencies did not necessarily represent the start of a trend reversal, and was more a function of correction. "For the most part, the environment for emerging markets is still favourable, with real interest rates still higher compared to other developed economies." Foreigners sold a net R13bn worth of local bonds over the past week, according to the JSE’s weekly statistics data. The weaker rand has the potential to breed inflation, though exporters tend to benefit from its weakness. Markets were also keeping a close watch on ...
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