30 July 2020
South Africa’s rand weakened in early trade on Thursday, as investors kept a close eye on the coronavirus trajectory with many countries still recording a surge in COVID-19 cases.
At 0625 GMT, the rand traded at 16.6900 per dollar, 0.88% weaker than its previous close.
“Although the major currency pairs have held steady after the (Federal Reserve statement) last night, the rand, along with its emerging-markets peers, is trading marginally weaker relative to the USD, although they have largely had a better month overall thus far against the USD,” Nedbank analysts said in a note.
“This is as the second round of COVID-19 infections plagues the world.”
The head of the Federal Reserve said on Wednesday the surge in U.S. coronavirus cases was beginning to weigh on economic activity, as the U.S. central bank left interest rates near zero to support the battered economy.
In South Africa, confirmed COVID-19 cases have also surged at a faster rate in recent months and the country now has the largest cases so far on the continent. The South African Reserve Bank has also cut interest rates to record lows to support growth.
Government bonds also weakened, and the yield on the benchmark instrument due in 2030 added 4.5 basis points to 9.310% in early trade.