South Africa’s rand weakened on Friday, giving back some of the gains booked in the previous session as technical selling by investors wary of a rising dollar put the currency under pressure.
At 0640 GMT the rand was 0.35 percent weaker at 12.3425 per dollar from a close of 12.3000 overnight in New York.
The currency rallied to a new 2-1/2 year best of 12.2325 on Thursday on speculation that President Jacob Zuma’s term, which ends in 2019, would be cut short as early as next week.
A rise in global appetite for riskier currencies, seen in a relatively weaker greenback recently, also supported the rand as it lured investors seeking higher yields.
But early on Friday the rand had backtracked as investors bearish on the currency cashed-in small profits and looked for defensive positions ahead of U.S. payroll data expected to show strong growth.
A Reuters poll on Friday found analysts expect the rand is likely to weaken over 12 percent this year, hit by doubts about how much the new leader of the ruling African National Congress, Cyril Ramaphosa a promised reformer, can do for South Africa’s ailing economy.
Bonds were weaker, with the yield on the government paper due in 2026 up 1.5 basis points to 8.555 percent.
Stocks were set to open flat, with the benchmark Top-40 futures index barely changed. Reuters