Rand falls to 'weakest level ever'

November 6, 2015, 3:19pm

Article and photo by Fin24, News24 

Johannesburg - The rand weakened sharply to a record low against the dollar after firmer-than-expected non-farm payrolls data from the United States on Friday.

By 16:13 the rand had slipped 2% to R14.17/$, its weakest level ever against the greenback as the growing likelihood of a rate hike by the Federal Reserve in December pressured emerging assets.

"The move is dollar bound, because of the non-farm payrolls. It means they (US Fed) can start lifting interest rates and that is obviously bad for the rand," NKC African Economics chief economist Christie Viljoen said.

The local unit ignored central bank data showing domestic net gold and foreign exchange reserves edged up slightly to $41.308bn in October but succumbed to dollar strength following the positive jobs data.

The dollar rose to a 6-1/2 month high after the US jobs report beat expectations, increasing 271 000 last month to its largest rise since December 2014.

Stocks also fell, with the blue-chip index down 2.5% to 47 332 points following the US employment figures.