Monday, January 4, 2016 8:38 am
South Africa’s rand was under early pressure against the dollar on the first trading day of 2016 on Monday, with pressure on the currency set to continue as weak domestic fundamentals weigh.
According to Reuters, the JSE securities exchange’s Top-40 futures index was down 1.25 percent, suggesting the local bourse would start the year at 0700 GMT more than 570 points lower.
By 0650 GMT the local unit was down 0.78 percent at 15.5800 to the greenback compared with its Dec. 31 close of 15.4600.
“Given that most investors are expected to still be away on holiday, we expect rand moves to prove erratic amid thin trading this week,” Barclays Africa said in a note.
Government bonds edged higher in early trade, with the yield for the benchmark 2026 issue dipping 2.5 basis points to 9.745 percent.
The local currency lost about a quarter of its value against the greenback in 2015, mainly due to investors dumping emerging markets in anticipation of higher U.S. interest rates.
Concerns about weak growth in Africa’s most developed economy also weighed and the shock removal of the finance minister in early December triggered a heavy sell-off that pushed the currency to a historic low of 16.0485.