South Africa's rand under pressure despite trade surplus

South Africa's rand weakened against the dollar on Friday, as a larger than expected trade surplus for December failed to offset the selling pressure on emerging currencies as investors brace for policy tightening in the United States.

 

The local unit surrendered gains made the previous day after South Africa's own central bank kept domestic rates unchanged and moved to dampen market expectations of a rate cut this year prompted by a sharp drop in oil prices.

At 1553 GMT the rand traded 0.53 percent softer at 11.6150 to the greenback compared with where it ended the New York session on Thursday.

Government bonds also edged lower, and the yield on the 2026 benchmark inversely ticked up half a basis point to 7.135 percent.

The rand weakened even after data from the revenue service showed South recorded a trade surplus of 6.85 billion rand in December after a revised 5.27 billion rand shortfall in November.