Home Economy South Africa’s rand lifted by faster Chinese growth

South Africa’s rand lifted by faster Chinese growth

61
0

The rand firmed on Wednesday ahead of consumer inflation and retail sales data, lifted by rising global risk demand after China’s economy grew faster than expected.

At 0645 GMT the rand was 0.39% firmer at R13.9800 per dollar after closing at R14.0350 overnight in New York, with tightening liquidity ahead of Easter holidays amplifying moves as traders looked to lock in positions.

China’s economy grew at slightly better-than-forecast 6.4% in the first quarter, defying expectations for a further slowdown as industrial production jumped sharply, spurring appetite for assets from emerging and commodity-driven economies.

South Africa, in particular, depends on exports of raw materials to China, with local economic growth in the last decade mirroring that of the world’s no. 2 economy, and Beijing’s ongoing trade spat with the United States has also influenced investment flows.

Inflation figures for March are due at 0800 GMT followed by retail sales data at 1100 GMT.

Price growth is set to remain close to the central bank’s target of 4.5% and supportive of the rand as a high-yield target while US lending rates remain on pause.

Bonds also firmed, with the yield on the benchmark 10-year government issue falling 3 basis points to 8.47%.

In equities, Clicks reported a 6.2% increase in turnover despite a difficult business climate that has seen fellow retailers struggle to make a profit as consumers cut down on concessionary spending.

 

*This article first appeared on Reuters

LEAVE A REPLY

Please enter your comment!
Please enter your name here