Rand weaker before key data releases

Rand opened weaker on Tuesday, above 18.00 to the dollar, as pressure on emerging-market currencies added to the effects of Moody’s downgrade of the country’s credit to junk.

At 09:00 the rand was 0.6% weaker at 18.0150 to the dollar, after a close at 17.9100 overnight in New York.

On Friday, Moody’s downgraded South Africa’s rating one notch to “Ba1” from “Baa3” and maintained a negative outlook. S&P Global and Fitch downgraded their ratings to sub-investment grade in 2017.

With employment and trade figures due later in the session, traders the rand to react to signs of a further economic slowdown.

Bonds also started weaker, with the 10-year government bond’s yield adding 7 basis points to 11.66%.