South African rand hits new Covid fear, variant

South African rand.

RapidEye | iStock | Getty Images

The South African rand fell sharply against the dollar on Friday after a new variant with many mutations was discovered in the country.

The currency fell to as low as 16.2391 against the dollar during Asia’s opening hours on Friday and last traded about 1.6% weaker at 16.2215 per share. dollars.

The losses came as investors rushed to safe-haven currencies such as the Japanese yen, which strengthened about 0.6% against the dollar to 114.69 per dollar. The US dollar index, which follows the dollar against its peers, was at 96,712 – compared to levels below 96.5 seen earlier in the week.

A currency analyst told CNBC’s “Street Signs Asia” on Friday that the big pull in the brink may be due in part to fewer trades being made during Asian hours.

“This basic news about the new variant in [South] Africa, combined with thin liquidity in Asia, is clearly driving part of this price action, “said Adarsh ​​Sinha, co-head of Asia’s exchange rates and currency strategy at Bank of America Securities.

World Health Organization officials said Thursday that they are monitoring a new variant with several mutations to the tip protein – the part of the virus that binds to cells in the body. The National Board of Health is planning a special meeting on Friday to discuss what this could mean for vaccines and treatments.

The variant, called B.1.1.529, has been detected in South Africa in a small number, according to the WHO.

“We do not know much about this yet. What we do know is that this variant has a large number of mutations. And the concern is that having so many mutations can have an impact on how the virus behaves. , and it may affect how the virus behaves. ” Maria Van Kerkhove, WHO’s technical director at Covid-19, said in a Q&A that was livestreamed on the organization’s social media channels.

A few hours after the announcement, the UK announced that it would temporarily suspend flights from six African countries.

– CNBC’s Hannah Miao contributed to this report.

.

Leave a Comment