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The rand weakened early Friday when US President Donald Trump’s late-night announcement that he had tested positive for Covid-19 lowered demand for risk.
At 0645 GMT, the rand was 0.6% weaker at R16.70 per dollar from an overnight close at R16.60, halting a rally that has seen the unit gain around 4% this week.
In a tweet, Trump said that he and his wife Melania Trump had tested positive and that they would begin the quarantine immediately.
That sparked further volatility in currency markets that were already nervous about the upcoming US presidential election in November and fears of a second wave of coronavirus infections in the US and Europe.
“The rand is trading defensively alongside other riskier assets under reduced liquidity conditions due to market holidays in China and India,” market economists at ETM Analytics said in a note.
“Ahead of nonfarm payroll data later this afternoon, momentum may stagnate, but given the overriding news of Trump’s illness, market sentiment will remain a constraint for riskier currencies including the ZAR.
Bonds also weakened, with the 2030 benchmark government issue yield rising 4.5 basis points to 9.45%.
