Johannesburg - The rand hit a fresh five month low against
the dollar on Friday, falling in line with other emerging market currencies hit
by another bout of risk aversion stemming from a frail global growth outlook
and concerns about Europe’s banks.
The rand was trading at R8.4460 at 06:36 GMT, down 1.24%
against the greenback from Thursday’s close of R8.34. The rand’s next support
is the psychologically key R8.50 level.
“The rand weakened this morning on the back of very weak
Asian trade as sentiment deteriorated post the downgrade of Spanish banks,”
said Brigid Taylor, head of institutional sales at Nedbank.
“It was also driven by the outcome - or the lack thereof -
of the Greek and French political issues during the duration of the week.”
Moody’s Investors Service cut the long-term and deposit
ratings of 16 Spanish banks on Thursday, just as the prospect of more state
bailouts for banks have pushed the country’s borrowing costs higher.
Fears are also growing that Greece will quit the euro - an
outcome that would pile more pressure on other ailing European economies.
Government bonds opened weaker, with the yield on the 2015
bond up half a basis point at 6.455% while the longer-dated 2026 note added 1.5
basis points to 8.325%.