South Africa's rand softer as Moody's relief rally fades

  • Reuters
  • Forex News
South Africa's rand softer as Moody's relief rally fades
Credit: © Reuters.

JOHANNESBURG, April 2 (Reuters) - South Africa's rand fell on Tuesday, tracking Asian currencies lower as an uptick in United States manufacturing data lifted demand for the dollar.

At 0640 GMT the rand ZAR=D3 was 0.35 percent weaker at 14.2150 per dollar compared to a close of 14.1650 overnight in New York, retreating from a 1-week high hit after Moody's delayed a potential credit rating downgrade.

After the decision, which came late on Friday, the currency rallied more than 3 percent to it's best level since March 21, but on Tuesday came under selling pressure as traders who had targeted levels above 14.70 on the short-side exited their positions. rebound in U.S. factory activity and a strong increase in construction spending revived hopes the world's no. 1 economy was not slowing as sharply as previously feared, boosting the greenback and treasury yields.

Another weak South African PMI print, with the measure of factory activity recording a third consecutive decline in March also dampened demand for the rand given the weak economic outlook weakened, with the yield on benchmark government paper due in 2026 ZAR186= adding 1.5 basis points to 8.51 percent.

Stocks were set to open flat after a strong rally in the previous session, with the JSE securities exchange's Top-40 futures index ALSIc1 up 0.05 percent.

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