Rand leads currency declines as bond yields rise to year high

The rand fell for a second day on Monday, tracking commodity prices lower as China’s industrial production trailed estimates. Bond yields rose to the highest in a year.

China’s manufacturing and trade expanded less than estimated last month. The world’s second-biggest economy is the biggest buyer of South African raw materials, including iron ore and coal. Non-farm payrolls in the United States rose more than economists forecast in May, a June 7 report showed. This came two weeks after US Federal Chairman Ben S. Bernanke said $85-billion of monthly bond purchases may be reined in if there is sustained improvement in the jobs market.

“While the US data has been too strong for comfort, Chinese figures have been too weak,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said. “The net result of the US and Chinese data has been to put the high-yielding commodity currencies under pressure.”

South Africa’s currency slumped 2.2% to R10.18 per dollar as of 10:20am in Johannesburg, the worst performance out of 24 emerging-market currencies monitored by Bloomberg. Yields on benchmark 10.5% bonds due December 2026 jumped for a fourth day, rising 22 basis points to 8.18%, the highest since June 14 last year.

The Standard & Poor’s GSCI Index of raw materials declined for the first time in six days as prices of metals including copper, nickel and platinum fell. Metals and other mining commodities account for more than 50% of South Africa’s exports, according to government data. – Bloomberg


Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

Advertising

Subscribers only

How lottery execs received dubious payments through a private company

The National Lottery Commission is being investigated by the SIU for alleged corruption and maladministration, including suspicious payments made to senior NLC employees between 2016 and 2017

Pandemic hobbles learners’ futures

South African schools have yet to open for the 2021 academic year and experts are sounding the alarm over lost learning time, especially in the crucial grades one and 12

More top stories

Egypt, Seychelles get first jabs

The two countries have rolled out China’s Sinopharm vaccine, but data issues are likely to keep some countries from doing the same

Fashion’s future is bricks and clicks

Lockdown forced reluctant South African clothing retail stores online: although foot traffic in brick-and-mortar stores remains important in a mall culture like ours, the secret to success is innovation

What the Biden presidency may mean for Africa

The new US administration has an interest and much expertise in Africa. But given the scale of the priorities the administration faces, Africa must not expect to feature too prominently

Zuma, Zondo play the waiting game

The former president says he will talk once the courts have ruled, but the head of the state capture inquiry appears resigned to letting the clock run out as the commission's deadline nears
Advertising

press releases

Loading latest Press Releases…