Views Article – Sharenet Wealth

Africa, Forex

South Africa’s rand firms ahead of retail sales data

JOHANNESBURG, Jan 15 (Reuters) – South Africa’s rand firmed against the dollar early on Wednesday, as investors awaited retail sales numbers, looking for clues on the health of the economy in the final quarter of last year.

Market focus was also on the initial trade deal which U.S. President Donald Trump and Chinese Vice Premier Liu He were due to sign at the White House at 1630 GMT.

The rand traded at 14.3550 per dollar at 0640 GMT, 0.35% firmer than its previous close.

In fixed income, the yield on the benchmark government bond was flat at 8.26%.

“We have local retail sales data out today, which should give an insight into what 4Q19 GDP will be; but investors are expecting a relatively dismal print due to load-shedding (power cuts), so it shouldn’t move markets too much,” RMB analyst Michelle Wohlberg wrote in a note.

Statistics South Africa is due to publish November retail sales figures at 1100 GMT. A Reuters poll of economists predicted a 1.5% expansion in the economy’s largest sector, following a 0.3% rise in October.

Africa’s most industrialized economy has been suffering its most severe blackouts in a decade, as state-owned South African utility Eskom struggles to meet demand because of breakdowns at its coal-fired power plants.

The nationwide power cuts that have dented economic output and sapped investor confidence in the economy.

On Thursday, the statistics agency will publish mining production data, while the South African Reserve’s monetary policy committee will announce its interest rate decision after keeping rates on hold at 6.5% at its last meeting. (Reporting by Olivia Kumwenda-Mtambo; Editing by Andrew Heavens)

South African Rand coins are seen in this photo illustration

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