* Rand, bonds hit by risk aversion on global growth worries
* Weak China prospects weigh on commodity currencies
* Bonds sold-off as market sees increased supply
JOHANNESBURG, April 4 (Reuters) – South Africa’s rand
weakened as much as 1.2 percent to a seven-week low against the
dollar on Wednesday and government bonds also fell, hit by
waning risk appetite for emerging market assets as recent data
points to stuttering global growth.
The rand touched a session low of 7.84/dollar, its
weakest level since Feb. 16 according to Reuters data, and was
at 7.8225 by 1655 GMT, down 1.0 percent from Tuesday’s close.
Government bonds followed suit, with the yield on the
three-year benchmark bond jumping 8.5 percent to close
at 6.81 percent. The yield on the 14-year bond added
eight basis points to 8.51 percent.
“There are slight concerns now filtering in that we aren’t
seeing momentum in global growth, and that’s really what’s
caused this risk-off environment,” Standard Bank trader
Warrick Butler said.
The latest minutes from the Federal Reserve suggesting there
might not be any further monetary stimulus in the United States
added to the pressure, while signs of stilted growth in China
was also weighing on commodity currencies in particular.
“Countries like South Africa and Australia are going to feel
the brunt of it (weak China growth) and that’s why the Aussie is
underperforming and the rand is under-performing as well,”
Butler said.
Continued…
