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Johannesburg - The rand extended losses against the dollar on Thursday, having fallen as much as 1% in the previous session after US Federal Reserve chair Janet Yellen said a rate rise in 2015 remained likely.
By 08:00 the rand, along with other emerging market currencies, had weakened 0.2% to R12.4440/$ after a close of 12.4190 in New York. The dollar index was up 0.2% in early trade.
READ: Dollar up on Fed chief rate hike comments
Risk sentiment eased after Greece's parliament passed austerity measures demanded by lenders for a new bailout and to keep the country inside the eurozone currency bloc.
READ: Greek parliament approves bailout measures
Government bonds were firmer, with the yield on the benchmark issue maturing in 2026 down 4 basis points to 8.125%.
With no local data due, attention turned to next week's interest rate decision by the South African Reserve Bank (SARB), which has kept lending rates unchanged since July 2014, but looks likely to lift them as the economy continues to struggle.
"The SARB will be mindful of the current stagflation dilemma, but will likely hike local interest rates should the Fed initiate a hike at the September policy meeting," Nedbank analysts said in a note to clients.
