Publications
Partners
Johannesburg - The rand dropped nearly 2% against the dollar on Friday, hitting an eight-month low as the US currency charged after positive employment data in the world's biggest economy.
The rand fell 1.7% to 11.3800, its weakest since January 30 when it hit 11.3900. It may breach that level if the US economy continues to show signs of strength, backing the case for its central bank to raise interest rates.
Meanwhile, the rand has been pressured this week by poor domestic economic data such as a wider-than-expected trade deficit and depressed consumer confidence in Africa's most advanced economy.
If it breached 11.3900, the rand would be at its weakest in six years.
The dollar was bolstered by data that showed hiring in the United States increased more than expected and that the jobless rate was at its lowest in six years.
"There is still a compelling reason for the dollar to remain firm and the crosses to remain weak, but I think we might see a short-term depreciation of the dollar and that might give the rand some relief and potentially we get to levels sub-11," said Paul Chakaduka of Johannesburg-based brokerage Global Trader.
Yields on government bonds rose to 8.365% immediately after the US jobs report with dealers expecting resistance on the yield around the 8.40% level hit in August.
