South African rand hits new coronavirus fears, variant

South African rand.

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

The currency fell to 16.2391 against the US dollar during Asian trading hours on Friday and last traded about 1.6% lower at 16.2215 per dollar.

The losses came as investors rushed to use safe haven currencies such as the Japanese yen, which gained about 0.6% against the dollar to 114.69 per dollar. The US Dollar Index, which tracks the dollar against its peers, stood at 96.712, up from levels below 96.5 seen earlier this week.

One currency analyst told CNBC “Street Signs Asia” on Friday that the large rand move could be attributed in part to fewer deals in Asian hours.

“This is fundamental news about the new variant in [South] Africa, coupled with low liquidity in Asia, is definitely the driving force behind this price movement, ”said Adarsh ​​Sinha, co-head of currency strategy and exchange rate policy in Asia at Bank of America Securities.

World Health Organization officials said Thursday they are watching a new variant with multiple mutations in the spike protein, the part of the virus that binds to cells in the body. The health agency is planning a special meeting for Friday to discuss what this might mean for vaccines and treatments.

According to the WHO, the variant, dubbed B.1.1.529, was found in South Africa in small numbers.

“We don’t know much about it yet. What we do know is that this variant has a large number of mutations. And the problem is that when you have so many mutations, it can affect the behavior of the virus, “Dr. Maria Van Kerkhove, WHO technical lead on Covid-19, said in response to questions that were broadcast live on channels organizations in social networks.

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.

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