JOHANNESBURG, June 19 (Reuters) - The South African rand weakened in early trade on Friday, pressured by a firmer dollar and hawkish signals from the U.S. Federal Reserve that dampened appetite for riskier assets.
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At 0613 GMT the rand traded at 16.50 against the dollar , about 0.3% down from its previous close.
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The currency came under pressure as investors reassessed expectations for U.S. interest rates, with Fed officials signalling that borrowing costs may need to remain elevated for longer to curb inflation.
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The greenback strengthened against a basket of currencies, rising to a one-year high.
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Analysts have said that the USD's advance reflects a sharp repricing of US rate risk rather than safe-haven demand.
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"Upside surprises in payrolls and persistently low layoffs reinforced the view that the US economy can tolerate tighter policy, while cheaper Brent crude failed to offset higher short-term US yields. For South Africans, this keeps USD liquidity expensive and caps ZAR rallies," said ETM Analytics in a note.
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South Africa's benchmark 2035 government bond was also weaker in early deals, as the yield rose 5 basis points to 8.32%.
Reporting by Anathi Madubela; Editing by Aidan Lewis
Source: Reuters