JOHANNESBURG (Reuters) -South Africa’s rand slipped on Wednesday as growing tensions in South Korea drove investors to the safe-haven dollar, while markets awaited clues on the interest-rate path of the world’s biggest economy.
At 1500 GMT, the rand traded at 18.13 against the U.S. dollar, around 0.3% weaker than its previous close.
“Geopolitical tensions sourcing from South Korea have weighed negatively against the rand this Wednesday as markets favour the safety of the greenback,” said Warren Venketas, trading services manager at IG Group.
South Korean lawmakers on Wednesday proposed impeaching President Yoon Suk Yeol for his sudden decision to declare martial law, which he rescinded after a chaotic standoff between parliament and the army that damaged the country’s standing.
Meanwhile, data out of the U.S. showed private payrolls increased at a moderate pace in November.
Markets will use the ADP employment report to make bets on the Federal Reserve’s policy decision later this month. Chair Jerome Powell is also set to speak later on what is expected to be his last public remarks before the meeting.
“Markets are not fully convinced by a 25 (basis point) cut just yet, so any and all incoming data will be monitored carefully should they move the current outlook,” Venketas said.
Like most emerging market currencies, the rand takes direction from global drivers such as U.S. economic data in addition to local events.
Domestically, South African private sector activity increased for a fourth consecutive month in November as firms took on more workers and grew more confident about the economic outlook, a survey showed.
On the stock market, the Top-40 index closed about 0.6% higher.
South Africa’s benchmark 2030 government bond was weaker, with the yield up 4.5 basis points to 8.945%.
(Reporting by Bhargav Acharya and Tannur Anders; Editing by Andrew Heavens and Arun Koyyur)
