Currencies of commodity-exporting countries tumbled versus the U.S. dollar as speculation increased that China will take more measures to cool economic growth, curbing appetite for raw materials.

The U.S. currency extended gains versus most of its 16 most-traded counterparts after jobless claims fell more than forecast for the latest week and existing home sales increased more than projected in December. Data showed China's economic growth accelerated, adding to pressure for monetary tightening. South Africa's rand, and the New Zealand, Australian and Canadian dollars dropped as prices for crude oil, gold and copper slumped.

"The Chinese numbers were the catalyst for the risk-off day," said Paresh Upadhyaya, head of Americas Group of 10 currency strategy at Bank of America Corp. in New York. "The concerns of further Chinese tightening gathered momentum and you saw the commodity bloc currencies come under pressure."

The South African rand fell 1.6 percent to 7.1076 per dollar at 10:39 a.m. in New York, from 6.9931 yesterday. It touched 7.1127, the weakest since Dec. 1. New Zealand's dollar dropped 1.9 percent to 75.43 U.S. cents and the Aussie lost 1.7 percent to 98.43 U.S. cents.

Eoin Treacy's view The US Dollar has firmed over the last week as stock and commodity markets have encountered at least near-term resistance. This has helped to fuel demand for the currency in a replay of the pattern that has emerged over the last few years, where stocks and commodities have exhibited an inverse correlation with the US Dollar.

The Dollar peaked against the South African Rand in late 2008 near R12. During the subsequent two years, it gave up its entire advance and retested the 2007 low near R6.5 three weeks ago. It has since rallied impressively and is now testing the 8-month progression of lower rally highs. A sustained move above R7.2 would indicate a return of Dollar demand dominance beyond the short term.

Recent Rand weakness has had a negative effective on South African ADRs. For example Sasol, in which I had a spread-bet position until today, remains in a consistent uptrend when quoted in Rand but has failed to break upwards when quoted in US Dollars.