RMBH: 8,493 0 (0.00%)
Politics weighs on South Africa's rand, stocks
(Updates prices, adds context, stocks)
JOHANNESBURG, June 12 (Reuters) - South Africa's rand
weakened against the dollar on Wednesday, extending earlier
losses after mixed local data and the anti-graft ombudsman's
calls for President Cyril Ramaphosa to respond to findings from
an investigation into a bribe scandal.
At 1523 GMT, the rand was almost 1% weaker at
14.8200 per dollar compared to a close of 14.6750 overnight in
The rand struggled while other emerging market currencies
including Brazil's real and the Mexican peso were
benefiting from hopes the Federal Reserve would raise interest
rates after data showed U.S. inflation was barely changed in
Although South African retail sales data published on
Wednesday showed a pick-up in sales growth in April, retail
inflation fell below its March level reflecting a constrained
spending environment, also highlighted by the Bureau for
Economic Research in its business confidence index for the
second quarter, Investec said in a note.
Meanwhile, an investigation into a campaign donation
received by Ramaphosa from a company implicated in graft hit the
headlines after publication of a letter in which the anti-graft
watchdog explains Ramaphosa has until June 21 to respond to the
preliminary findings of the investigation, which will be
finalised after he does so.
Ramaphosa's office said in a statement on Wednesday on its
website that he remained committed to fully cooperating with the
investigation and ensuring it was swiftly concluded.
"We expect the uncertainty about the impact of Mkhwebane's
investigation on Ramaphosa's reform drive to continue to weigh
on the rand in the next few days, with the USD/ZAR potentially
surpassing the 14.88 resistance level," Juri Kren, of Continuum
Economics, said in a note.
Stocks were also down after the United States took a tough
line on trade talks with China, triggering a dip in global
The Johannesburg Stock Exchange's benchmark Top-40 Index
fell 0.07% to 52,619.43 points while the broader
All-Share Index dipped 0.1% to 58,706.35 points.
Tobacco company British American Tobacco was among
the biggest losers on the blue-chip index, dropping 3.12% to a
17.85 rand share price after warning of steeper sales declines
globally due to waning demand for tobacco.
The weak rand also hurt financials, with major lender
Nedbank down 2.03% to a 259.12 rand and Rand Merchant
Bank Holdings closing 1.85% lower at 82.65 rand.
(Reporting by Mfuneko Toyana, Emma Rumney and Naledi Mashishi
Editing by Andrew Cawthorne and Frances Kerry)
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