Rand weaker after disappointing retail sales figures
Rand weakens despite a risk-on global environment, with domestic issues weighing on sentiment
The rand was weaker against major global currencies on Wednesday afternoon, faring worst against the pound, weighed down by disappointing local factors.
Load-shedding continues to dampen sentiment, analysts said, while earlier economic data underscored the fragile state of SA’s economy.
Retail sales in December contracted 1.4% year-on-year, well below the consensus expectation of 2.7% growth.
At 2.15pm, the rand was 0.65% weaker at R13.8598/$; 0.63% softer at R15.6962/€; and 0.9% lower at R17.9119/£. The euro was flat at $1.1325.
The pound was finding some support from better-than-expected inflation data out of the UK.
The dollar had come under pressure overnight after US President Donald Trump said he may opt not to implement new tariffs on China on March 1, when a deadline for a trade deal elapses.
The current global environment was supportive for the rand, said Mercato Financial Services analyst Nico du Plessis. “There still appears to be appetite for emerging-market assets from foreigners, and should the wall of money that has been seen in the past two weeks resume, the troubles in SA could be masked by a general improvement in risk appetite.”