Rand Weakens With Commodities, Set for 1st Weekly Fall in Three

The rand declined, set for its first weekly retreat in three, as commodity prices tumbled, damping South Africa’s growth prospects. Bond yields rose.

South Africa’s currency declined as much as 0.4 percent and traded less than 0.1 percent weaker at 8.7439 per dollar as of 9 a.m. in Johannesburg, bringing its retreat this week to 1 percent. Yields on 6.75 percent bonds due 2021 rose one basis point to 6.69 percent, for a gain of seven basis points this week.

The Standard & Poor’s GSCI Index of raw materials slumped to a 12-week low as metals including copper and silver declined. Metals and other commodities account for 45 percent of South Africa’s exports, according to government data. Stocks (MXEF) fell after Apple Inc. joined companies reporting earnings that missed estimates, weighing on emerging-market currencies, including the rand.

“Growth-sensitive commodities remain on a downtrend,” John Cairns and Josina Solomons, currency strategists at Rand Merchant Bank in Johannesburg, said in e-mailed comments. “The rand is likely to trade sideways” until the release of U.S. third-quarter gross domestic product data later today, they said.

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net