Rand steady as it recovers from day’s worst levels

“The rand may move weaker than R14.50 in the immediate term, although this is a significant resistance level for the domestic currency,” she said. The rand is likely to fluctuate at first, before depreciating further, unless risk aversion subsides.

At 2.58am the rand was at R14.2388 from R14.2507, at R16.2574 to the euro from R16.2186 and at R18.1866 to the pound from R18.1807.

The euro was at $1.1418 from $1.1375.

While the US 10-year treasury has been firming again in safe-haven trade, local bonds have been weakening on Turkey’s emerging-market contagion.

After closing at 8.87% on Friday, the local 10-year benchmark government bond was bid at 9.12%, after opening at 8.865%.

At these levels, local bond yields remain even higher than those in Turkey. Yields on the Turkish 10-year government bond hit a record high of 8.914% on Monday morning, after falling briefly to 8.427% on Friday. Foreigners are concerned about the country’s ability to repay its foreign-currency-denominated debt, much of which is in US dollars, which may threaten the country’s banking system.

The 10-year US treasury yield retreated to 2.87% on Friday last week, from 2.97% earlier in the week, and was last seen at 2.8768%.