Newly printed one hundreded rand Mandela notes. File Picture: REUTERS
Newly printed one hundreded rand Mandela notes. File Picture: REUTERS

The rand was softer on Monday afternoon as the dollar held on to firmer levels against the euro while the pound fell through the crucial $1.30 level.

The dollar gained after German headline factory orders contracted by a monthly 4% in June, significantly below consensus expectations.

"This may be the first signs that trade disputes between the eurozone and the US might be having an effect," Barclays Research analysts said.

The dollar has been firmer since Friday, despite nonfarm jobs data out of the US came in marginally lower than expected. Despite this, the US Federal Reserve is still set to raise interest rates another two times this year.

The growing trade conflict between the US and China, among other countries and regions, should be positive for the dollar even though the foreign-exchange market currently "remains indecisive on the consequences", Commerzbank said.

The dollar will rise as long as the Fed reacts in a "normal" way to higher inflation from more expensive imports and to a "further heating up of the US economy" due to substitution of imports by domestic products, Dow Jones Newswires reports.

The pound fell to its lowest in 11 months against the dollar on Monday as concerns the UK could exit the EU without a deal outweigh last week’s Bank of England (BOE) interest-rate increase.

On Friday, BOE governor Mark Carney said the risks of a no-deal Brexit were "uncomfortably high", while UK international trade secretary Liam Fox told Britain's Sunday Times there was a 60% chance of Brexit talks ending without a deal.

"The pound is very vulnerable to political uncertainty," Rabobank analysts said.

At 2.55pm, the rand was at R13.4422 to the dollar, from R13.3346. It was at R15.5144 to the euro from R15.4285, and at R17.3737 to the pound from R17.3491.

The euro was at $1.1542 from $1.157 and the pound was at $1.2925 from $1.301.

Local bonds were weaker with the R186 bid at 8.73% from 8.685%.

The US 10-year treasury was last seen at 2.9455% from 2.9492%.