The rand lost more than 1% as the new week of the new month began, with uncertainty and concerns about global growth putting emerging-market currencies under pressure.
The rand at the mercy of global movements, we expect the rand to continue to trade quite erratically within the R16.50 – R17.50. The rand slipped to its weakest in two months on Tuesday, in a risk-averse mood amid fears over the pace of economic recovery as coronavirus cases surge.
At 1640 GMT, the rand was 1.24% weaker at R17.3975 per dollar, after hitting a session low of R17.5350, its weakest since 1 June.
“The COVID-19 pandemic still has the ability to shift market sentiment almost daily, giving rise to increased volatility, especially in emerging market currencies where there is no discernible long-term trend due to the sentiment changes,” analysts at TreasuryONE said in a note.
“With the rand at the mercy of global movements, we expect the rand to continue to trade quite erratically within the R16.50 – R17.50.”
Coronavirus infections continue to surge, with global cases crossing 18.35 million. The World Health Organisation warned that the road to normality would be long, with some countries requiring a reset of strategy.
In South Africa, COVID-19 cases breached the 500,000 mark over the weekend, and the economy continued to show signs of a slower recovery as car sales and factory activity remained subdued.
On the bourse, the FTSE/JSE All Share Index gained 0.75% to 56,249 points while the Top-40 Companies Index rose 0.74% to 51,951 points.
South African telecommunications giant, Telkom closed up 4.87% to R28.00, after the company announced it will now provide financial services.
Further gains were seen in the gold index, which rose 2.65%, with Harmony Gold Mining up 3.33% to R114.00.
Bonds were weaker, with the yield on benchmark 2030 government paper up 7 basis points at 9.350%.