Rand weak­ens

The Herald (Zimbabwe) - - Business -

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.

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