Johannesburg - The rand slipped as much as 1 percent on Tuesday as the dollar surged on firm housing data that once again put interest rate hikes by the US Federal Reserve back in focus.
By 1600 GMT the rand had regained some ground, 0.8 percent weaker to 12.1960 per dollar, after falling as low as 12.2400 following a 5 percent rise in US housing sales.
The firm data also boosted the dollar index, which firmed by nearly 1 percent, as anticipation of larger rate increase by the Fed and higher US bond yields made dollar investments more attractive.
The local currency looked set to test resistance at 12.10, briefly breached the previous session, after the deficit on South Africa's current account narrowed more than expected to 4.8 percent of GDP.
“The rand did well after the deficit numbers but the constraint really seems to be euro/dollar,” said currency analyst John Cairns of RMB.
The euro fell more than 1.2 percent versus the dollar
on Tuesday as the deal between Greece and its creditors hung in the balance, weighing on the common currency.
Local bonds were mostly flat, with the benchmark government issue due in 2026 adding 1 basis point to 8.295 percent.
Reuters