SABC News - Rand retreats, sales data weakens case for rate hike:Thursday 15 May 2014

Rand retreats, sales data weakens case for rate hike

Thursday 15 May 2014 05:40

SABC

Investors are also keeping a nervous eye on the four-month old wage strike in the platinum mining sector(SABC)

The rand softened against the dollar on Wednesday despite a generally risk-positive global environment, weighed down by weak retail sales data that undermined the case for a domestic rate hike this month.

 Investors are also keeping a nervous eye on the four-month old wage strike in the platinum mining sector, after the government vowed to crack down on violence linked to the boycott and to arrest those intimidating miners trying to return to work.

At 1527 GMT, the rand traded at 10.3290 to the dollar, down 0.24 % from Tuesday's New York close.
   
The rand had earlier touched a session low of 10.3620 after Statistics South Africa said retail sales grew by a lower-than-expected 1% year-on-year in March, compared with 2.3% in February.
   
The report adds to recent economic data suggesting the South African Reserve Bank (SARB) might hold off hiking interest rates this month, despite inflation hovering at the top of a 3-6% target band.
   
"For a market assessing the likelihood of imminent SARB tightening ... the weak retail sales print will serve as a timely reminder of the ongoing bearish news on the real economy," said Standard Chartered's head of Africa research, Razia Khan.
   
Government bonds held their ground on Wednesday, with the yield for the 2026 secondary market benchmark shaving off 6 basis points to 8.035%.
   
The 2015 paper at the shorter end of the curve fell 2.5 basis points to 6.51%.

Share this page: Printer friendly version