Rand, bonds weaker ahead of rating reviews

Johannesburg - The rand was slightly on the back foot against the dollar on Friday and was likely to stay under pressure ahead of sovereign credit rating reviews from Fitch and Standard & Poor's.

Government bonds were also quoted weaker, with the yield for the benchmark instrument maturing in 2026 rising 6 basis points to 8.695%, its highest since February 2014, according to Thomson Reuters data.

By 08:10 the rand was at R14.3850/$, 0.14% off Thursday's close of 14.3645 in New York.

The rand hit an all-time low of 14.4950 earlier in the week after official data showed the trade deficit widened sharply in October, underlining sluggish growth in Africa's second-largest and most industrialised economy.

Traders and analysts expect further losses on Friday should negative reviews be forthcoming from Fitch, which rates South Africa at "BBB" with a negative outlook, and Standard & Poor's, which has it at "BBB-" with a stable outlook.

Investors were also eyeing US jobs numbers which could strengthen the case for interest rate hike in the world's biggest economy in December, whittling the appeal of high-yielding but riskier emerging-market assets.

"It's like Guy Fawkes Day for local markets," said Rand Merchant Bank currency analyst John Cairns.

"Risk is massive, with US non-farm payrolls this afternoon and rating actions this evening, while global volatility and risk-off are elevated."