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# A strong dollar is dragging the rand down, while French debt worries pushed the euro to a 17-month low
- URL: https://www.businessbagel.com/rand-weakens-dollar-euro-17-month-low-france/
- Published: 2026-10-07T03:00:00.000Z
- Updated: 2026-10-07T02:59:59.000Z
- Description: The rand is near its weakest against the dollar since July, but a euro now costs less than R19, down from more than R20 a year ago.
- Author: Christian Maidman
- Tags: Markets, Business Bagel News

Anyone who bought dollars on Monday paid more than they would have a week earlier, while anyone buying euros paid a good deal less than a year ago. The rand traded at about R16.67 a dollar at midday, close to its weakest level since late July, after sitting below R16.40 less than a week before. It has now lost ground for four weeks in a row.

## Why the dollar keeps winning

US government bonds are paying more, and that makes American assets more attractive to the money that might otherwise sit in places like South Africa. The yield on the ten-year US Treasury note was 5.260% on Monday, a little off the 24-year high it touched the week before. Matthew Ryan, head of market strategy at Ebury, told Reuters the dollar is the main winner, because a global sell-off in government debt is also sending money into it as a safe haven.

South Africa feels that through its bond market. Investec chief economist Annabel Bishop said in a note that foreigners had sold a net R14.5 billion of South African bonds since early the previous week, though government finances that are seen to be improving have limited the damage. Yields on those bonds are now around 9.0%, up from below 8.0% after February's favourable Budget.

## France's problem, not the rand's

The euro has had a rougher time of it. It sank to $1.1161 on Monday, its weakest since May 2025, after four straight weekly falls, as investors fretted about France's debt and political gridlock ahead of next year's election. The extra return investors demand to hold French government debt instead of Germany's reached about 1.5 percentage points on Friday, the most since the eurozone's debt crisis in 2011.

That is why a euro cost R18.67 on Monday, down from more than R20 a year ago. Anyone paying a European supplier gets more euro for every rand than they did twelve months ago. The pressure on the rand is coming from the dollar, not from Europe.

## A budget and a rate decision

Andre Cilliers, a currency strategist at TreasuryOne, warned that a move above R16.80 to the dollar could open the way to R17\. Bishop is looking closer to home for support. She reckons a quarter-point rate hike at the Reserve Bank's November meeting is all but priced in and should help the rand, and she expects the Medium-Term Budget Policy Statement on 21 October to show tax collections running ahead of plan, helped by miners earning more from gold and platinum.