(Reuters) -South Africa’s rand weakened on Monday, resuming its downward trend from the week before, as the safe-haven dollar strengthened amid global growth fears.
At 1531 GMT, the rand traded at 17.0325 against the dollar, 0.74% weaker from its previous close. On Monday, it hit a level unseen since September 2020.
The dollar, boosted by expectations that the Federal Reserve will hike interest rates faster and further than peers, came closer to parity against the euro. The dollar index, which measures the currency against six counterparts, rose 0.8% to 107.89.
The rand was battered last week and hit multiple lows as investors sought the safety of the U.S. dollar at a time of high economic uncertainty as fears over a looming global recession grow.
Investec analyst Annabel Bishop said in a research note that the rand was being afflicted by negative sentiment on both international and domestic events, such as Friday’s publication of higher-than-expected U.S. payroll figures and severe power cuts in South Africa.
On the Johannesburg Stock Exchange, the Top-40 index was down 1.77% to 61,008.16 points while the broader all-share dropped 1.61% to 67,226.75 points.
The government’s benchmark 2030 bond was lower, with the yield up 13.5 basis points to 10.765%.
(Reporting by Bhargav Acharya in Bengaluru and Anait Miridzhanian in Gdansk; editing by Jonathan Oatis)
