The rand was substantially weaker against major currencies on Thursday morning as fear about the health of China’s economy led to renewed volatility in global financial markets.
Early on Thursday‚ Beijing authorities halted trade in the stock market for the second time this week as the Shanghai Composite index plunged dramatically in the first 30 minutes of trade. The index fell by more than 7%.
Dow Jones Newswires said the sell-off was in response to a move by the People’s Bank of China to further devalue the yuan against the dollar.
At 8.33am‚ the rand was at R16.0015 against the dollar from R15.8614 previously.
Against the euro the rand was at R17.3099 from R17.1016. The local unit was at R23.4025 against the pound from R23.2071.
The euro was at $1.0819 from a previous close of $1.0781.
Meanwhile‚ a US private employment report released on Wednesday pointed to healthy December jobs growth.
The ADP employment report for December showed private payroll growth of 257‚000‚ coming in solidly above the consensus expectation of 198‚000.
The report is considered by some as a harbinger of the US nonfarm payrolls report‚ due for release on Friday.
A strong employment report is likely to add more pressure to the already ailing local currency.
- TMG Digital/BDlive
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