Rand falls to weakest level in two months

JOHANNESBURG - The rand has continued to weaken, falling to its lowest level in more than two months. The currency has weakened beyond R16.70 to the US dollar on Thursday, a level last seen in late July. The rand had been among the better-performing emerging-market currencies in recent months, despite the ongoing war in the Middle East. However, the currency is now coming under pressure from renewed expectations around inflation and interest rates. Surging oil prices are fuelling concerns about inflation, while higher interest rates in the United States are strengthening the dollar. Further US rate hikes are also expected, adding to the pressure on emerging-market currencies. Higher US interest rates have pushed up bond yields, making dollar-denominated assets more attractive to investors and reducing the appeal of currencies such as the rand.