Rand falls versus stronger dollar

The South African rand fell in early trade on Wednesday, as hawkish comments from US Federal Reserve officials bolstered the dollar.

At 0605 GMT, the rand traded at R14.73 against the dollar, 0.4% weaker than its previous close.

The dollar scaled its highest in nearly two years as Fed officials pushed for a quick reduction in the central bank’s bloated balance sheet, with one of them expressing openness to hefty rate increases of half a percentage point.

Higher rates in developed markets tend to drain capital from higher-yielding but riskier emerging markets such as South Africa.

Government bonds weakened alongside the currency, with the yield on the benchmark 2030 maturity rising 3.5 basis points to 9.615%.