Rand plummets to new low against dollar
THE rand weakened sharply to a record low against the dollar after firmer-than-expected non-farm payrolls data from the US yesterday.
By 1413 GMT the rand had slipped 2.0 percent to 14.1700, its weakest level against the greenback as the growing likelihood of a rate hike by the Federal Reserve in December pressured emerging assets.
“The move is dollar bound, because of the non-farm payrolls. It means they (US Fed) can start lifting interest rates and that is obviously bad for the rand,” NKC African Economics chief economist Christie Viljoen said.
The local unit ignored central bank data showing domestic net gold and foreign exchange reserves edged up slightly to $41.308 billion in October but succumbed to dollar strength following the positive jobs data.
The dollar rose to a 6½ month high after the US jobs report beat expectations, increasing 271 000 last month to its largest rise since December. Stocks also fell, with the blue-chip index down 2.5 percent to 47 332 points following the US employment figures. – Reuters