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Rand on the ropes as China fuels risk aversion

Johannesburg - The rand traded within striking distance of the previous day's 14-year low against the dollar on Friday, weighed down like other commodity currencies by signs of slowing growth in China.

The local unit ploughed a new record low against pound sterling, while visiting its weakest level in eight months versus the euro, in largely risk averse trading conditions.

READ: Rand’s 14-year low not a headache for Sarb governor

By 08:42, the rand was at R12.9535/$, down 0.18% from Thursday's close.

It hit a session low of 14.6502 against the euro its weakest since mid-December last year, and fell to a new all time low of 20.4070 to the pound.

The rand had earlier drifted lower to 12.9870/$, very close to the previous day's trough of 13.0050, which was its weakest level since December 2001.

READ: Rand breaches R13/$ for the first time in 14 years

"Fears over the state of the Chinese economy hit global markets hard overnight and pressures will continue into today after the release of a very weak China Markit PMI figure," RMB analyst John Cairns said.

"The silver lining is that Fed hikes may have to be postponed," he added, referring to receding expectations that the US Federal Reserve will start raising interest rates as early as September.

READ: Strong jobs, inflation data muddy US rate talk

Expectations of imminent policy tightening in the world's biggest economy have drawn investment away from high-yielding emerging currencies. This has helped weaken the rand 12% against the dollar so far this year.

Government bonds were a tad softer in early trading, with the yield for the 2026 benchmark adding one basis points to 8.285%.

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Rand - Dollar
18.88
+0.3%
Rand - Pound
23.85
+0.2%
Rand - Euro
20.38
+0.2%
Rand - Aus dollar
12.32
+0.1%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
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Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
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