Rand down in early trade

The rand weakened early on Monday, its recent rally running out of steam as investors worried again about the pace of an economic rebound.

At 0700 GMT the rand was 0.1% weaker at R14.62 compared to a close of R14.59 on Friday in New York.

The currency rallied to R14.44 last week, its strongest in six weeks, but again failed to hold below R14.50.

Recent demand for emerging-market currencies has been driven by weakness in the US dollar and Treasury yields after minutes from the US central bank’s latest meeting showed it was in no hurry to tighten monetary policy.

But the rocky outlook for South Africa’s economy, which shrunk by a record 7% in 2020 and has shown signs of a sticky rebound in 2021, has halted the rand’s rally, with investors taking profits and awaiting new data.

Bonds were weaker, with the yield on the benchmark 2030 government issue up 6 basis points to 9.36%.