SOUTH Africa’s rand snapped a five-day winning streak against the dollar on Monday, reflecting renewed concerns about the impact U.S. interest rate hikes could have on emerging markets.
The JSE securities exchange’s Top-40 futures index was down 0,4%, pointing to a slightly weak start for the local bourse at 0700 GMT.
Government bonds also retreated, with the yield on the benchmark government bond maturing in 2026 adding 3.5 basis points to 8,45%.
At 0646 GMT, the rand traded at 14.0125 against the dollar, down 0,45% from Friday’s close at 13.9500.
The rand had climbed to 13.8900 late last week, its strongest since Nov. 6, after the central bank raised the benchmark repo rate by 25 basis to curb inflation pressures.
The central bank move may not be enough to cushion the rand, which has weakened nearly 18% this year as part of an emerging market sell-off prompted by expectations that the U.S. will start raising interest rates soon.
“The probability of a rate hike by the Fed … has risen since last week,” Standard Bank said in a note.-Reuters