JOHANNESBURG (Reuters) – South Africa’s rand weakened early on Tuesday, as the dollar rebounded from a fall in the previous session triggered by weaker-than-expected U.S. economic data.
At 0630 GMT, the rand traded at 14.4525 against the dollar, 0.35% weaker than its previous close.
The dollar drifted higher, pausing a monthlong decline as investors consider whether a roaring U.S. economic recovery may force interest rates higher, looking to upcoming economic data and policy speeches for clues.
The rand has mainly taken its cue from risk sentiment in global markets, in the absence of local catalysts.
Investor attention will soon turn to a scheduled review of South Africa’s sovereign credit by Moody’s on Friday. The rating agency already assigns a “junk” status to the country but with a negative outlook there is the potential for a further downgrade.
Government bonds firmed with 2030 paper yielding 9.135%, down 5.5 basis points.
(Reporting by Olivia Kumwenda-Mtambo; Editing by Kirsten Donovan)