Rand slide continues after 5% tumble this week

The rand weakened in early trade on Thursday, after slumping almost 5% this week amid concerns over global economic growth and a United States credit rating downgrade.

At 0604 GMT, the rand traded at 18.49 against the dollar, about 0.16% weaker than its previous close.

The dollar last traded at 102.64, about 0.05% stronger against a basket of global currencies.

Rand/dollar exchange rate 

The rand, like other currencies, weakened against the greenback this week after Fitch’s credit rating downgrade of the US “led to higher credit spreads and risk-off”, said Rand Merchant Bank analysts in a research note.

Read: US stripped of AAA rating by Fitch as budget deficits swell

“(The dollar/rand exchange rate) is trading more normally, tracking the usual global factors. But with the (dollar) strengthening and global risk assets weakening that still leaves (the dollar/rand exchange rate) with an upside bias,” RMB added.

The rand often takes cues from global economic factors in the absence of local movers.

Locally, the country’s monthly whole economy PMI data will be released at around 0715 GMT, which will provide insight into South Africa’s private sector activity.

South Africa’s benchmark 2030 government bond was flat in early deals, with the yield at 10.390%.