Publications
Partners
Johannesburg - The rand veered closer to a fresh 4-year low against the dollar on Tuesday, reflecting a global sell-off of emerging market currencies after a US credit rating outlook upgrade.
The market was awaiting domestic factory output for April on Tuesday, and another weak number - following two straight months of year-on-year contraction - could put more pressure on local assets, reinforcing that the economy is struggling to grow after a recession in 2009.
Government bonds fell in tandem with the rand, pushing the yield for the 2026 issue up 12.5 basis points to 8.39%.
The yield for the shorter-dated bond due in 2015 climbed 15 basis points to 6.31%.
By 08:35 the rand traded at R10.25 to the greenback, down 0.6% from Monday's close at R10.1870 and just three cents adrift of last month's four-year low of R10.2850.
"US debt continues to attract flows at the expense of emerging markets. All EM bonds are being sold aggressively. South Africa is no exception," said RMB market analyst John Cairns.
"Local issues only add to the pressure," he added, referring to strikes in the mining sector and worries that the national electricity grid could come under pressure as winter commences.
