JOHANNESBURG: South Africa's rand retreated further against the dollar on Wednesday as risk sentiment switched, with investors now seeing a greater chance of rate rises in the United States.
Stocks were little changed despite sharp gains by Naspers after its Chinese investment Tencent Holdings reported higher profits.
By 1549 GMT, the rand had weakened 0.63 percent to 13.4890 per dollar, its weakest level in two sessions, slipping further away from technical resistance around 13.3000.
The rand barely moved after June retail sales registered slower than expected growth, again raising fears that Africa's most industrialised economy may contract for a second consecutive quarter after shrinking 1.2 percent in the first.
Retail sales rose 1.7 percent year-on-year in June, according to Statistics South Africa data on Wednesday, much slower than the 3.8 percent expansion predicted by a Reuters poll of analysts. Retail sales grew 4.5 percent in May. Government bonds edged lower with the yield on the benchmark paper due in 2026 up 1 basis point to 8.445 percent.
Traders said the rand could see further losses if the release of US Federal Reserve minutes after the close of local trade revealed an appetite to raise interest rates this year.
"The rand has had a decent run over recent weeks, as have commodity currencies in general," 4Cast analysts said in a note.
"But while interest rates are far above even the higher returns among the 'developed' world, we suspect that some USD/ZAR shorts have headed to the exit."
On the bourse, stocks were little changed with the benchmark Top-40 index 0.01 percent weaker at 45,386 points while the All-Share index shed 0.17 percent to 52,309.
Shares in Harmony Gold fell 6.4 percent to 53.94 rand after it reported a return to profit, but lowered the life of its Kusasalethu mine near Johannesburg to five years from 24 due to declining ore grades.
Media and e-commerce firm Naspers saved the bourse from steeper losses, with its shares advancing 4.5 percent to 2,230.00 rand.
Naspers, which holds a third of Tencent, rallied after the Chinese mobile gaming and social network firm posted a 47 percent jump in second-quarter profit.
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