Cur­rent ac­count deficit pushes rand down

Weekend Argus (Saturday Edition) - - BUSINESS -

THE rand and govern­ment bonds weak­ened yes­ter­day af­ter bet­ter-than-ex­pected US jobs data boosted ex­pec­ta­tions that the US Fed­eral Re­serve will scale back its as­set pur­chas­ing pro­gramme.

The rand fell most sharply against the dol­lar among a bas­ket of 20 emerg­ing mar­ket cur­ren­cies, shed­ding 1.7 per­cent to a ses­sion trough of 10.1930 against the green­back, its weak­est level in nearly two weeks.

The yield on the mar­ket bench­mark 2026 bond climbed 20 ba­sis points to close at 8.105 per­cent. The yield on the 2015 pa­per added 13 ba­sis points to 6.15 per­cent.

“It was all about the non-farm pay­rolls, which were dol­lar-pos­i­tive all round, and the rand took the brunt of that,” a trader said.

Fears that the US Fed will with­draw its bond-buy­ing pro­gramme as its econ­omy gains trac­tion have put emerg­ing mar­ket as­sets un­der pres­sure as in­vestors per­ceive risks as out­weigh­ing their at­trac­tive re­turns.

The rand is ad­di­tion­ally vul­ner­a­ble be­cause of a yawn­ing cur­rent ac­count deficit of nearly 6 per­cent of GDP, while labour strife in the min­ing sec­tor has also dented sen­ti­ment.

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