South African rand weaker on soaring US Treasury yields

JOHANNESBURG (Reuters) -The South African rand was weaker on Thursday on soaring U.S. Treasury yields and market jitters over a wider Middle East conflict, ahead of a speech by Federal Reserve Chair Jerome Powell.

At 1505 GMT, the rand traded at 19.0425 against the dollar, about 0.3% weaker than its previous close.

Market jitters intensified on concerns over the conflict in the Middle East and rate hike expectations in developed economies, ETM Analytics market analyst Bheki Mahlobo told Reuters.

“The prospect of a prolonged war has also led to surging oil prices, weakening SA’s trade dynamics and denting the outlook of the ZAR (rand),” he added.

U.S. Treasury yields hit 16-year highs on Thursday, boosted by expectations that the Fed would keep interest rates higher for longer.

The rand often takes cues from global factors such as U.S. monetary policy in addition to local factors.

Global markets will turn their attention to a speech by Powell later in the day for hints on the future interest rate path of the world’s biggest economy.

Shares on the Johannesburg Stock Exchange closed lower, with the blue-chip Top-40 index down about 1.5% and the broader all-share index about 1.4%.

South Africa’s benchmark 2030 government bond was weaker, with the yield up 6 basis points to 10.885%

(Reporting by Tannur Anders with additional reporting by Bhargav Acharya; Editing by Alison Williams)