UPDATE 1-S.African rand jittery as U.S. yields hit multi-year highs; stocks flat

  • Reuters
  • Forex News
UPDATE 1-S.African rand jittery as U.S. yields hit multi-year highs; stocks flat
Credit: © Reuters.

* Emerging market currencies wilt on dollar strength

* Stocks: rand hedges enjoy currency weakness (Updates to reflect afternoon trading)

JOHANNESBURG, April 24 (Reuters) - South Africa's rand reversed early gains and traded weaker for a second day on Tuesday, as further gains for U.S. Treasury yields supported the dollar and dented appetite for emerging market assets.

At 1514 GMT the rand ZAR=D3 was 0.2 percent weaker at 12.3750 per dollar in volatile trade. Earlier it set a new three-month low against the U.S. currency.

Emerging market currencies worldwide have borne the brunt of recent dollar strength .DXY , but the rand has fallen more than most.

The South African unit had traded in a tight range since late January, but is now down around 2 percent since the end of last week.

Analysts said they expected the rand to continue to track global trends in the absence of closely watched local data releases.

"For the moment trade is muted. The main factors are external," said Gerrit van Rooyen at NKC Research.

As the U.S. 10-year Treasury yield US10YT=RR rose to 3 percent for the first time in more than four years on Tuesday, appetite for South African government bonds was weak. yield on the benchmark bond due in 2026 ZAR186= rose 8 basis points to 8.235 percent, reflecting softer bond prices.

In the equities market, both the benchmark Top-40 index .JTOPI and the Johannesburg All-Share index .JALSH were each 0.01 percent lower at 50,871 points and 57,675 points respectively.

Market-heavyweight e-commerce and Pay-TV firm Naspers NPNJn.J was responsible for the negative moves, closing 0.07 percent up at 3,026 rand.

Rand hedges benefited from the slightly weaker rand, with luxury goods maker Richemont CFRJ.J up 1.10 percent to 117.37 rand. British American Tobacco (LON: BATS ) BTIJ.J gained 0.21 percent to 642.32 rand while Glencore (LON: GLEN ) GLNJ.J rose 0.80 percent to 65.54 rand.

Rand hedges, shares of companies with operations abroad that make the bulk of their revenue outside South Africa tend to benefit from a weaker rand.

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