Rand under pressure as market eyes US rate hike

Johannesburg - The rand snapped a five-day winning streak against the dollar on Monday, reflecting renewed concerns about the impact US interest rate hikes could have on emerging markets.

The JSE's Top-40 futures index was down 0.4%, pointing to a slightly weak start for the local bourse.

Government bonds also retreated, with the yield on the benchmark government bond maturing in 2026 adding 3.5 basis points to 8.45%.

At 08:46, the rand traded at R14.0125/$, down 0.45% from Friday's close at 13.9500.

The rand had climbed to 13.8900 late last week, its strongest since November 6, after the South African Reserve Bank (Sarb) raised the benchmark repo rate by 25 basis to curb inflation pressures.

READ: SA hikes interest rates

Sarb's move may not be enough to cushion the rand, which has weakened nearly 18% this year as part of an emerging market sell-off prompted by expectations that the US will start raising interest rates soon.

"The probability of a rate hike by the Fed ... has risen since last week," Standard Bank said in a note.