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South Africa’s Rand Falls To ‘Weakest Level Ever’

The rand weakened sharply to a record low against the dollar after firmer-than-expected non-farm payrolls data from the United States on Friday.

By 16:13 the rand had slipped 2% to R14.17/$, its weakest level ever against the greenback as the growing likelihood of a rate hike by the Federal Reserve in December pressured emerging assets.

“The move is dollar bound, because of the non-farm payrolls. It means they (US Fed) can start lifting interest rates and that is obviously bad for the rand,” NKC African Economics chief economist Christie Viljoen said.

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The local unit ignored central bank data showing domestic net gold and foreign exchange reserves edged up slightly to $41.308bn in October but succumbed to dollar strength following the positive jobs data.

The dollar rose to a 6-1/2 month high after the US jobs report beat expectations, increasing 271 000 last month to its largest rise since December 2014.

Stocks also fell, with the blue-chip index down 2.5% to 47 332 points following the US employment figures.

 

 

Source news24

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Written by How Africa

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