* Rand falls quickly after Fitch cuts outlook
* Bonds sell off following currency
JOHANNESBURG Jan 13 (Reuters) – The rand tumbled 2
percent against the dollar late in Friday’s session as investors
dumped the currency after Fitch downgraded South Africa’s rating
outlook.
The rand had looked ready to firm through 8 rand to the
dollar, a resistance level, before the announcement, but the
combination of Fitch’s action and reports of possible downgrades
to some European countries saw investors march out of risky
positions before the weekend.
The rand weakened to its worst level in a week at
8.2249, retreating quickly from the session high of 8.0235
touched earlier.
Fitch cut South Africa’s rating outlook to negative, saying
it had seen limited progress on several long-standing structural
issues that have caused the economy to fall behind its peers.
South African shares also lost on the Fitch move, which is
likely to see investors charge South Africa more to borrow.
Government bonds reacted to the negative mood with yields
climbing 6.5 basis points to 6.795 percent on the 2015 issue
and 3.5 basis points to 8.565 percent on the 2026 bond
.
Continued…
