The South African rand fell to its lowest in five weeks on Friday, as the central bank mopped up dollar supply as a measure to curb currency strength, while waning global risk appetite also weighed.
Stocks inched to their fourth straight gain, renewing a 2-1/2-year high, with retailer Truworths (TRUJ.J) advancing after it said it expects first-half profits to increase by as much as 20 percent.
The rand ZAR=D3 traded at 6.9425 to the dollar at 1600 GMT, from a close of 6.8446 in New York on Thursday. Earlier in the session it fell nearly 1.8 percent before recouping some of its losses.
The rand ZAR=D3 traded at 6.9425 to the dollar at 1600 GMT, from a close of 6.8446 in New York on Thursday.
The currency fell to a session low of 6.9669 earlier on Friday, its weakest level since Dec 8, breaking through previous support at 6.90.
Traders in an earlier session had pointed to the central bank cleaning out dollars from the market in an intervention to halt the rand's strength against the greenback.
Markets were also rattled after China raised its bank reserve requirements by 50 basis points earlier in the day, putting a damper on risk appetite.
It is more risky to be long rand knowing that they have been around recently to sell rand, Gabor Ambrus, emerging markets analyst at 4Cast said.
China's reserve requirement worsened risk appetite, the hike knocked gold prices down as well. Earlier a euro/dollar rally knocked euro/rand stops and this took dollar/rand along, like a good storm, Ambrus said.
STOCKS INCH HIGHER
Johannesburg's blue-chip Top-40 index .JTOPI edged up just 0.1 percent, but still managed to eke out its highest close since June 2008, finishing at 9,226.96
The broader All-share index .JALSH inched up 0.09 percent to 32,661.06.
Miners, which have advanced in recent sessions on stronger metals prices, fell in tandem with base metals prices after the move by China's central bank.
Diversified miner African Rainbow Minerals (ARIJ.J) was among the decliners, dropping 1.6 percent to 219.99 rand.
Shares of Truworths helped offset the decline, however. The retailer gained 2.6 percent to 71.11 rand after its bullish outlook for first-half earnings.
Shares of fixed-line telephone operator Telkom (TKGJ.J) fell 1.7 percent to 36.36 after it said its acting chief executive will not renew his contract, raising concerns about succession at the troubled firm. [ID:nLDE70D1DL]
Local bonds were not spared from the weakening. The benchmark 2015 bond ZAR157= was up by 5.5 basis points to 7.545 percent and the 2026 note ZAR186= was up by 4 basis points at 8.53 percent.
I think the main thing to come out of the bond market has been the offshore account off-loading stock ... so our local yields have obviously responded negatively, said Alvin Chawasema, a bond dealer at Renaissance BJM.