Weak US data offers South African rand reprieve
Signs of faltering expansion in the world’s biggest economy have made a June rate hike less likely.
JOHANNESBURG - The rand recouped earlier losses against the dollar on Thursday, turning slightly firmer after weak US home sales and manufacturing activity data pointed to sluggish growth.
Signs of faltering expansion in the world's biggest economy have made a June rate hike less likely.
This has in turn bolstered investors' appetite for assets denominated in high-yielding emerging currencies like the rand.
At 1539 GMT the local unit traded at 12,2005 versus the greenback, up 0,22 percent from its New York on Wednesday and off a session low of 12,3000 reached earlier.
"It would seem that the rand is marginally stronger mostly on the back of dollar weakness," said Nilan Morar, head of trading at Global Trader.
"We've had (US) jobless claims which were higher than anticipated ... We also had new home sales data which was weaker than expected."
But weak domestic fundamentals, most significantly South Africa's worst power crunch in seven years, will likely cap any significant rand gains.
In fixed income, bond yields trekked higher, with the benchmark instrument maturing in 2026 adding five basis points to 8,085 percent.