JOHANNESBURG. South Africa’s rand weakened early yesterday, giving up the previous session’s gains as investors short on the local and other emerging currencies were squeezed out of those positions by a swift, albeit brief turnaround in the Turkish lira.
At 0650 GMT the rand was 0.42 percent weaker at 12.4975 per dollar, having rallied to 12.40 on Wednesday spurred by a broad emerging market relief rally after Turkey’s central bank said it would act to stem a sell-off in the lira.
The dollar was up against the euro and other major currencies, while the U.S. 10-year benchmark bond yield edged up past 3,11 percent.
The rand had weakened more than 3.5 percent by Wednesday in an emerging market sell-off that has been driven by a strong dollar and rapidly rising U.S. Treasury yields, extending a weakening trend over the past two months.
The relief offered by the Turkish lira stoked a short squeeze as the 12.40/$ level, used as a stop-loss mark by some investors, triggered a brief wave of selling as rand bears weary of a run to 12,20 closed positions.
Focus shifting to U.S. initial jobless claims with little locally on the data front.
South African bonds were weaker, with the benchmark paper due in 2026 yielding 8.51 percent, 4.5 basis points higher.