At 09:27, the rand traded at 19.8900, more than 0.8% weaker than its previous close. Photographer: Waldo Swiegers/Bloomberg
The South African rand hit a fresh record low in early trade on Thursday, extending a hammering from May on the back of souring investor sentiment.
The rand fell as low as 19.9075 against the U.S. dollar, worse than the previous record low of 19.8600.
At 09:27, the rand traded at 19.8900, more than 0.8% weaker than its previous close.
"The rand remains entrenched in the R19.50/R20.00 range, but short-term risks remain for a breach of the R20.00 level as investor outflows continue and exporter inflows remain limited," Andre Cilliers, Currency Strategist at TreasuryONE, said.
Worsening rolling blackouts and U.S. allegations that South Africa had supplied arms to Russia last year have left a sour taste in investors' mouths.
This sent the currency into a tailspin in May where it lost over 7% against the greenback.
The dollar was last trading 0.27% stronger against a basket of global currencies.
Investors were relieved when, overnight, the U.S. House of Representatives passed a bill to suspend the $31.4 trillion debt ceiling. Failure to pass could have tipped the world's biggest economy into a recession.
The bill is now headed to the Senate where the legislation could be enacted before the weekend.
"This will reduce the degree of risk aversion and potentially trigger a move back towards riskier investment destinations," ETM Analytics said in a research note.
Locally, investors will also take cues from the Absa Purchasing Managers' Index (PMI) survey of manufacturing activity, which will be published at 11:00.
Shares on the Johannesburg Stock Exchange were last trading up, with the blue-chip Top-40 index climbing more than 1%.
South Africa's benchmark 2030 government bond was weaker in early deals with the yield up 4 basis points to 11.340%.
Reuters