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Johannesburg - The rand traded on the back foot against the dollar on Wednesday, lagging emerging market peers as a bleak economic outlook and expectations of ratings downgrades later this week applied pressure.
By 08:38, the currency weakened 0.4% at R10.7475 to the dollar, threatening the R10.80 support level that held firm last week.
The rand is likely to trade with little impetus on Wednesday as investors await output data from the mining sector in the next session and credit ratings decisions from Fitch and Standard & Poor's on Friday, dealers said.
"Overall, the market seems to be positioning for the downgrade combined with a potential negative outlook," said Alexa Nicolau of Rand Merchant Bank in a market note.
With the rand facing negative sentiment from a five-month strike in the platinum sector and the threat of more work stoppages during an annual wage negotiation period, dealers said the currency could hit R10.80 soon.
The local unit was the biggest loser against the dollar in a basket of emerging market currencies tracked by Reuters.
Yields on government bonds also remained under pressure from hawkish central bank comments in the previous session.
The yield on the benchmark 2026 bond climbed 5 basis points to a week high of 8.415%, while the 2015 note rose 3.5 basis points to a five-week of 6.77%, as the prospect of tighter monetary policy hit the short-dated paper hardest.
By 08:38, the currency weakened 0.4% at R10.7475 to the dollar, threatening the R10.80 support level that held firm last week.
The rand is likely to trade with little impetus on Wednesday as investors await output data from the mining sector in the next session and credit ratings decisions from Fitch and Standard & Poor's on Friday, dealers said.
"Overall, the market seems to be positioning for the downgrade combined with a potential negative outlook," said Alexa Nicolau of Rand Merchant Bank in a market note.
With the rand facing negative sentiment from a five-month strike in the platinum sector and the threat of more work stoppages during an annual wage negotiation period, dealers said the currency could hit R10.80 soon.
The local unit was the biggest loser against the dollar in a basket of emerging market currencies tracked by Reuters.
Yields on government bonds also remained under pressure from hawkish central bank comments in the previous session.
The yield on the benchmark 2026 bond climbed 5 basis points to a week high of 8.415%, while the 2015 note rose 3.5 basis points to a five-week of 6.77%, as the prospect of tighter monetary policy hit the short-dated paper hardest.
