South African rand recovers after four-day losing streak; stocks inch up
(Updates to reflect afternoon trading)
JOHANNESBURG, June 13 (Reuters) - South Africa's rand
recovered some ground on Wednesday, bouncing back against a
weaker dollar despite retail sales data pointing to a sluggish
economy at the start of the second quarter.
At 1540 GMT, the rand traded at 13.2300 per dollar,
0.7 percent stronger than its close on Tuesday and snapping a
four-day losing streak.
Earlier on Wednesday the rand had wallowed at 13.3975 to the
dollar, its weakest since mid-December.
South African assets have been hurt recently by
disappointing first-quarter gross domestic product data and an
unfavourable external backdrop which has seen global investors
pull back from emerging markets.
The U.S. Federal Reserve is widely expected to raise
interest rates later on Wednesday, a move that typically
pressures currencies like the rand. But the dollar index
was weaker before the Fed announcement, benefiting some
developing market currencies including the rand and the Russian
Investors were looking to Wednesday's retail sales data for
signs that the South African economy had gained momentum since
President Cyril Ramaphosa's election as head of state in
February. But sales growth of 0.5 percent in April
came in below expectations for growth of 4.1 percent.
Still, many analysts are sticking with optimistic
predictions for the remainder of the year.
"Although April figures disappointed we still expect
household consumption expenditure growth of 2.3 percent in real
terms this year," Investec analysts wrote in a note to clients,
attributing the weak April reading partly to an increase in
value added tax from April 1.
In fixed income, the yield on the benchmark government bond
due in 2026 was down 3 basis points to 8.96 percent,
reflecting stronger bond prices.
Stocks ended slightly higher, but retailers performed
poorly. The Johannesburg Stock Exchange's Top-40 index
added 0.6 percent to 52,200 points, and the broader All-share
index gained 0.4 percent to 58,437 points.
Among the biggest risers, FirstRand gained 1.2
percent and Old Mutual added 1.4 percent, leading a
recovery in the financial services sector after a recent selloff
driven by worries about the pace of economic growth.
Retailers Truworths and Mr Price were
among losers, falling 3 percent and 2 percent, respectively.
(Reporting by Alexander Winning and Tiisetso Motsoeneng
Editing by James Macharia)
First Published: 2018-06-13 08:23:22
Updated 2018-06-13 17:56:58
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