JOHANNESBURG, South Africa (Reuters) – The South African rand slid in early trading on Monday. This follows losses of over 4% against dollar the previous week. Market attention this week is on global inflation data from major economies, including the U.S.
At 0610 GMT the rand was trading at 18,4900 per dollar, about 0.2% lower than its close on Friday, reflecting the similar rise of the dollar in global markets.
The rand’s sharp decline last week is partly due to the downgrading of U.S. Credit Rating. But it was given a reprieve by Friday, after U.S. Jobs Data sent the dollar spiraling and boosted risky currencies.
Rand Merchant Bank analysts wrote in a research report that currency markets are likely to be focusing on inflation data from China, Germany, and the United States.
This data will recalibrate the market’s view on monetary policies, and this will be reflected in the currency rates. A cautious start to the coming week is expected.”
The South African Treasury will auction its weekly Treasury bills on Monday.
According to data from the central bank, the country’s net reserves increased in July. They rose to $55.626 billion, up from $54.936 in June.
(Reporting and editing by Alexander Winning; Tannur Anders)