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Johannesburg - The rand weakened almost 1% against a rising US dollar on Wednesday, tracking a euro under pressure from bets that the European Central Bank would announce more monetary stimulus on Thursday.
The euro is the currency of South Africa's biggest trading bloc, making the rand vulnerable to shifts in euro zone sentiment. The rand was also under pressure as the dollar index rose to its highest since March 2009.
"It is dollar driven," IGM's Christopher Shiells said.
"Dollar/rand tripped stops after breaking 2-week highs around 11.15 and has extended the upside towards 11.2500-11.3550 in early November peaks."
The rand eased to 11.2360/dollar, its weakest since 14 November. The slump put the rand at the bottom of a basket of emerging market currencies trading against the dollar, according to data.
With the domestic data calendar bare, the ECB's monetary policy meeting and views on US monetary policy will dictate rand direction for the next few days.
"Policy divergence trades are the main thing at the moment.
"The SA Reserve Bank is seen more dovish of late (while) the Fed is to start policy normalisation," said Informa Global Markets analyst Christopher Shiells.
Government bonds weakened with the rand, with yields on the benchmark 2026 issue climbing to one-week highs of 7.755%.
