JOHANNESBURG (Reuters) -South Africa’s rand weakened more than 1% against the U.S. dollar on Friday as concerns about global economic growth weighed on risk sentiment.
At 1548 GMT, the rand traded at 18.7475 against the dollar, about 1.2% weaker than its previous close.
Hawkish comments from global central banks, including the U.S. Federal Reserve, stoked fears their aggressive monetary tightening could push economies into a deeper downturn.
The safe-haven dollar was buoyed by the comments and was last trading up 0.52% at 102.920 against a basket of six currencies.
“The risk aversion deepened on Friday as recession fears grow in Europe following the publication of much weaker-than-expected PMI data from the Eurozone and UK,” wrote Fawad Razaqzada, market analyst at StoneX, in a research note.
“We have seen global equities, crude oil and some emerging market currencies… selling off, while the US dollar has rallied against most major currencies,” he added.
The risk-sensitive rand, like most emerging market currencies, often takes cues from global drivers such as U.S. monetary policy and the dollar in the absence of local economic data points.
On the Johannesburg stock market, both the Top-40 index and the broader all-share closed about 0.9% lower on the day, having lost around 4% since the start of the week.
South Africa’s benchmark 2030 government bond was slightly stronger, with the yield down 1.5 basis points to 10.675%.
(Reporting by Bhargav Acharya and Tannur Anders; Editing by Nellie Peyton, Susan Fenton and Krishna Chandra Eluri)
