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South Africa's rand falls as virus woes weigh on risk appetite

Credit: REUTERS/THOMAS WHITE

South Africa's rand dropped to a four-month low early on Monday, with concerns over rising COVID-19 infections setting a cautious tone in global markets ahead of the U.S. Federal Reserve's meeting this week.

JOHANNESBURG, July 26 (Reuters) - South Africa's rand dropped to a four-month low early on Monday, with concerns over rising COVID-19 infections setting a cautious tone in global markets ahead of the U.S. Federal Reserve's meeting this week.

At 0650 GMT, the rand ZAR= traded at 14.8950 against the dollar, down 0.38% and trading at its weakest since March 31.

The currency fell last week after the South African Reserve Bank suggested on Thursday that interest rates would stay relatively low.

"The concerns over global growth due to COVID-19 are further weighing on the currency," said TreasuryONE currency strategist Andre Cilliers.

The dollar has in recent sessions benefited from safe-haven buying on fears a surge in infections of the fast-spreading Delta variant could derail the global recovery, pressuring riskier assets, such as rand.

Coronavirus cases continued to rise over the weekend with a number of countries in Asia and Europe battling to control the outbreak of the highly contagious Delta variant.

Market participants now wait for the U.S. central bank's meeting on Tuesday and Wednesday. While no policy change is expected, investors will look out for clues on when the Fed might start reining in its easy monetary policies.

(Reporting by Olivia Kumwenda-Mtambo Editing by Tomasz Janowski)

((Olivia.Kumwenda@thomsonreuters.com; +27 10 346 1084;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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