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Johannesburg - The rand extended its losses against the dollar on Tuesday as renewed risk aversion over eurozone debt concerns hit global financial markets.
At 09:32, the rand traded at R8.00 against the greenback after sinking to R7.9990 earlier from Monday's close in New York at R7.88/dollar. However, it strengthened 1.3% against the euro to R9.82. It was flat against the pound (R11.44)
South Africa's rand weakened against the dollar in early trade on Tuesday as renewed worries about the eurozone debt crisis weighed against risky assets globally.
Government bonds slipped from their levels in the previous session, weakening in line with the rand and ahead of a government bond auction and first quarter economic growth numbers at 11:30.
"The rand has weakened on the back of risk aversion again as we see these global equity markets track weaker," a trader in Johannesburg said.
"If we see a recovery we will see a bit of rand strength as a they (markets) are driven by sentiment at the moment."
Market analysts NKC predicted a 7.84 to 8.00 trading range for the rand on Tuesday.
Global markets were hit by fears that the eurozones sovereign debt crisis will spill into Europe's banking sector.
By 9:32, the JSE's all share index was down more than 2.5%.
A local trader said: "Stocks have opened sharply lower tracking developments in Asia, and amid continued fiscal concerns in Europe. Market sentiment is negative across the board - US futures are sharply lower, as is Europe.
European stock markets opened markedly lower on Tuesday, hit by Wall Street's weakness on Monday, concerns about the banking industry following the weekend rescue of Spanish regional savings bank CajaSur and worries about the growing tensions between North and South Korea, according to Dow Jones Newswires.
Government bonds also weakened in line with the rand and the yields, which trade inversely to the price, were up.
The yield on the 2015 issue added six basis points to 8.195 percent and that on the 2036 note rose 5.5 basis points to 8.99 percent.
Statistics South Africa will release GDP data for the first quarter at 11:30, which is expected to register annualised quarter-on-quarter growth of 4.3 percent on a seasonally adjusted basis from 3.2 percent in the fourth quarter.
- Reuters and I-Net Bridge
