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Johannesburg - The rand fell as much as 1% against the greenback on Friday as US jobs data reignited expectations that the Federal Reserve will cut back on asset purchases that have fed billions of dollars into high-yielding emerging markets.
Government bonds weakened in tandem with the currency, pushing their yields to multi-week highs across the curve.
The benchmark R186 bond maturing in 2026 leaped 18.5 basis points to 8.265% and the shorter-dated 2015 bond climbed 12 basis points to 6.135%.
By 15:50 GMT the rand was 0.75% weaker on the day at R10.3650/$ after earlier plumbing a session low of R10.4050/$, its weakest in 11 weeks.
"Dollar/rand got kicked higher following much better than expected US non-farm payrolls," said 4Cast emerging market analyst Anisha Arora. "Dollar/rand upside remains vulnerable, with the psychological 10.50 the key level to watch."
A scale-back of the US Federal Reserve's $85bn a month bond purchases would be detrimental for the rand given South Africa's heavy reliance on foreign portfolio flows to help plug a current account deficit of around 6% of GDP.
The domestic news flow has also been negative for the currency, which has fallen more than 22% against the greenback so far this year, weighed down by strikes that have slashed mine output in the world's largest platinum producer.
Government bonds weakened in tandem with the currency, pushing their yields to multi-week highs across the curve.
The benchmark R186 bond maturing in 2026 leaped 18.5 basis points to 8.265% and the shorter-dated 2015 bond climbed 12 basis points to 6.135%.
By 15:50 GMT the rand was 0.75% weaker on the day at R10.3650/$ after earlier plumbing a session low of R10.4050/$, its weakest in 11 weeks.
"Dollar/rand got kicked higher following much better than expected US non-farm payrolls," said 4Cast emerging market analyst Anisha Arora. "Dollar/rand upside remains vulnerable, with the psychological 10.50 the key level to watch."
A scale-back of the US Federal Reserve's $85bn a month bond purchases would be detrimental for the rand given South Africa's heavy reliance on foreign portfolio flows to help plug a current account deficit of around 6% of GDP.
The domestic news flow has also been negative for the currency, which has fallen more than 22% against the greenback so far this year, weighed down by strikes that have slashed mine output in the world's largest platinum producer.
