Rand loses further ground amid volatile global backdrop
The rand lost further ground on Thursday afternoon, but remained within its broad trading range against the dollar, which has been the centre of attention over the past few sessions.
The local currency weakened towards R12.60 to the dollar, as US government bond yields rose to multiyear highs before settling back a little, though the positive effect on the dollar was not as pronounced as it was a few days ago.
The dollar was relatively steady against the euro, but perked up against the pound and yen.
"While the speed of traders selling the … rand might have slowed down, the currency remains against the wall as a result of this continued buying momentum for the US dollar," said Jameel Ahmad, global head of currency strategy and market research at FXTM.
Geopolitical tension and a volatile Turkish lira added to the mix, which weighed on sentiment towards emerging markets, he said.
Over the past few sessions, the Turkish lira has hit a series of record lows against the dollar, despite recent increases in interest rates in the country.
The lira has since stabilised a little, after the Turkish central bank verbally intervened on Wednesday, saying it would meet President Recep Tayyip Erdogan, who is reportedly looking to interfere in setting monetary policy.
The rand is a key variable in the outlook for inflation, which the South African Reserve Bank closely monitors when deciding on interest rates.
The bout of volatility in the rand comes as economists expect inflation to rise in the coming months from the seven-year low of 3.8% reached in March.
At 3pm, the rand was at R12.5559 to the dollar from R12.4428, R14.8209 to the euro from R14.6918 and R16.9682 to the pound from R16.7858.
The euro was at $1.1803, from $1.1807.