Azernews.Az

By Bloomberg

South Africa’s rand slumped to a 2 1/2-month low against the dollar as investors look to U.S. jobs data this week for evidence that the economy is strong enough for the Federal Reserve to start raising interest rates.

The rand declined 1.1 percent to 12.2832 per dollar by 12:10 p.m. in Johannesburg. A close at that level will be the weakest since March 19 and marks the worst performance on Monday after Russia’s ruble and Poland’s zloty out of 24 emerging- market currencies monitored by Bloomberg.

A gauge of the dollar against its peers was near a six-week high on Monday before data that economists said will show a gain in personal income and faster manufacturing. Emerging-market currencies are also under pressure as Greece struggles to seal an accord with the International Monetary Fund, damping investor demand for higher-risk assets.

“The imminent U.S. Fed hike remains the key structural risk” for the rand, Mohammed Nalla, head of strategic research at Nedbank Group Ltd. in Johannesburg, said in a note. “Should the dollar build a new bull phase, the ramifications for the rand and other emerging-market currencies remain dire.”

Foreign-investor net purchases of South African bonds dwindled to 128 million rand in May, from 15.2 billion rand in April, according to Johannesburg Stock Exchange data. South Africa relies on portfolio inflows to bolster its current- account deficit, set to average 4.5 percent of gross domestic product in 2015, according to the median estimate of 17 economists in a Bloomberg survey.