* Liquid rand among the weakest against dollar on the day
* Local manufacturing data only briefly boosts rand
* Bonds rally, foreign demand still strong
JOHANNESBURG, July 12 (Reuters) – South Africa’s rand fell
as much as 1.6 percent against the dollar on Thursday, hitting
its weakest level in nearly two weeks as expectations of
near-term U.S. monetary easing were pared back, enabling a
broad-based dollar rally.
With domestic news taking a back seat to global
developments, the rand rallied only briefly after data showed
factory output outpaced forecasts in May, backing the case
against a local interest rate cut next week.
The rand touched a session low of 8.3745/dollar, its softest
since June 29, and was trading at 8.3485 by 1542 GMT, down 1.29
percent on the day.
It was the weakest performer among 20 emerging market
currencies tracked by Reuters.
“It’s a combination of risk emanating from the euro zone and
lack of support that people were expecting from the Fed (U.S.
Federal Reserve). There’s still reason for people to move away
from riskier markets at this stage,” ETM market analyst Luke
Barnett said.
“It tends to be the case for the rand (to underperform) on
these occasions since it’s one of the most liquid emerging
market currencies. I don’t really think it speaks to local
fundamentals right now.”
Continued…
