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The rand weakened in early trade yesterday as the US dollar rose, ahead of a leading business cycle indicator release and other economic data points later in the week.

The South African rand weakened yesterday on the back of a surge in US Treasury yields as investors turned away from riskier assets, analysts said.

At 1153 GMT, the rand traded at 19.0175 against the dollar, more than 1.3% weaker than its previous close.

The dollar was little changed against a basket of global currencies.

“I suspect the rand is playing catch-up to the rest of the market after the long weekend,” Danny Greeff, co-head of Africa at ETM Analytics, said. Trade was closed on Monday due to a national holiday.

On Monday, US Treasury yields reached 16-year highs, putting pressure on South African bonds.

“The yields on some (South African government bonds are) reaching highs not seen since the onset of the pandemic as investors rotate away from risk,” Greeff said.

South Africa’s benchmark 2030 government bond was weaker, with the yield up 11.5 basis points to 10.770%.

Yesterday, central bank data showed that South Africa’s composite leading business cycle indicator, which collects data on vehicle sales, business confidence, money supply and other factors, rose 0.1% month-on-month in July . — Reuters.