JOHANNESBURG (Reuters) – South Africa’s rand weakened on Monday, succumbing to a resurgent dollar and some profit-taking after seven weeks of gains sparked by leadership changes in the ruling party and a rally in global commodity prices.
At 0645 GMT the rand was 0.4 percent weaker at 12.3525 per dollar compared to a close of 12.3050 in New York on Friday.
Late on Friday U.S. nonfarm payrolls increased slightly less than expected, but traders bet the Federal Reserve remained on track to raise interest rates in 2018, igniting some dollar buying after a soft start to the year.
The rand has seen volatile trade in the first week of the year after a stellar 2017 that saw it rack up gains of 11 percent against the greenback.
Persistent rumours that President Jacob Zuma could be forced to step down before his term ends in 2019 supported some short term gains in the rand, but the rally stalled in the face of technical barriers and economic fundamentals.
Analysts saw strong resistance at around 12.24, while momentum indicators showed the currency in overbought territory and a likely target for continued selling.
Bonds traded firmer with yield on the benchmark paper due in 2026 down 1.5 basis points at 8.55 percent.
The blue-chip JSE Top-40 index opened 0.46 percent firmer at 52,083 points.
Reporting by Mfuneko Toyana; Editing By Joe Brock