As investors awaited U.S. employment data and its implications for Federal Reserve monetary policy, the South African rand declined against the dollar.
At 1551 GMT, the rand was trading at 18.2325 per dollar, approximately 1% lower than its previous close.
The Dollar Index was unchanged at 101.87 against a basket of six other currencies.
Since there will be no significant locally produced economic data on Tuesday, the rand is responding to international events.
The March report on nonfarm payrolls in the United States will be released on Friday when many global markets will be closed.
As a result of this week’s deluge of weak economic data, traders have reduced their forecasts for how much longer U.S. interest rates will need to remain in the restricted territory. However, the renewed talk of a recession has not helped to assuage nerves.
According to DailyFX analyst Warren Venketas, “the U.S. dollar gained traction on the back of its safe-haven allure, while the pro-growth component of the South African rand suffered.”
He attributed declining commodity prices to disappointing U.S. economic data, claiming that this further weakened the rand.
The Top-40 (.JTOPI) and All-share (.JALSH) indices on the Johannesburg Stock Exchange ended the trading day up approximately 0.6%.
The strength of the market was propelled by the resources sector (.JRESI), which gained more than 1% for the day.
The yield on the benchmark South African government bond maturing in 2030 increased by 5 basis points to 9.830 percent.
