The South African rand dropped to its lowest value against the world's reserve currency in five years on Thursday, as confidence spread about the U.S. Federal Reserve being likely to close economy-spurring asset purchases sometime this year, according to Bloomberg.
The currency of the largest economy on the African continent is likely to be impacted by manufacturing data from November of last year, which the nation is preparing to release during the Thursday trade session.
"Although we still believe that the risk lies in a softer-than-expected US payroll report on Friday, yesterday's price action serves as a reminder that the rand is unlikely to sustain a recovery so long as U.S. data proves to be encouraging," states a Thursday note authored by Absa Capital analysts, according to The Business Recorder. The note also stated the rand was heading toward its forecast of 11.00 to the dollar.
Bonds issued by South Africa monitored the downward dive of the rand on Thursday, The Business Recorder reports. Notes set for maturity in 2026 and 2015 each rose 3.5 basis points.
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