South African rand weakens, stocks open higher

South African Rand coins are seen in this photo illustration taken September 9, 2015. REUTERS, Mike Hutchings.

South African Rand coins are seen in this photo illustration taken September 9, 2015. REUTERS, Mike Hutchings.

Published Jun 8, 2022

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South Africa's rand weakened in early trade on Wednesday, as the dollar rose, helped by a rise in U.S. Treasury yields.

At 08:02 am, the rand traded at 15.4000 against the dollar, 0.29% weaker than its previous close.

The dollar index gained 0.1% against its rivals.

Commerzbank analysts said in a research note that stronger-than-expected first quarter GDP data reported on Tuesday, which gave the rand a boost in the previous session, was likely to constitute "a brief flicker".

"Not only the devastating floods in parts of the country in early April as well as massive shortages in the electricity supply are likely to notably dampen activity in the second quarter," Commerzbank said.

It added that the high inflation rate and rising wages were also likely to slow the economy.

On the stock market, the Top-40 index and the broader all-share rose around 0.5% in early trade.

The government's benchmark 2030 bond was stable in early deals at 9.970%.

Reuters