South African Rand Weakens As COVID-19 Cases Rise; U.S. Data In Focus – Reuters

JOHANNESBURG, Dec 10 (Reuters) – The South African rand weakened on Friday as a surge in COVID-19 cases hit risk appetite, while investors cautiously awaited U.S. data due later in the day to gauge inflationary pressure.

At 0530 GMT, the rand traded at 15.9900 against the dollar, around 0.2% weaker than its previous close and extending losses from a day earlier. read more

South Africa reported more than 22,000 new COVID-19 cases on Thursday, a record during the current fourth wave of infections driven by the Omicron coronavirus variant, but still below a peak of more than 26,000 daily cases during the third wave driven by Delta. read more

Although Omicron has caused cases to surge, so far it hasn’t led to a spike in deaths, and early anecdotal accounts suggest it may be causing mainly mild illness.

The U.S. consumer price index for November is expected to have risen 6.8% year-on-year, overtaking a 6.2% increase in October, which was the fastest gain in 31 years. read more

Any upside surprise will likely be interpreted as a case for a faster taper of the Federal Reserve’s asset purchases and sooner interest rate rises – a negative for assets deemed riskier like those in emerging markets.

The South African government’s 2030 bond was slightly firmer in early deals, with the yield dropping 3 basis points to 9.455%.

Reporting by Alexander Winning; Editing by Sherry Jacob-Phillips

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