Rand weakens as US retail data exceeds market expectations
Retail sales for June saw a 0.4% month-on-month rise, the same as in May, and twice as much as expected
The rand was weaker against the dollar on Tuesday afternoon after US retail sales exceeded market expectations slightly, as investors anxiously watch US economic data ahead of the US Federal Reserve’s (Fed's) interest-rate decision.
Retail sales for June rose 0.4% month on month, unchanged from May, and double the 0.2% expected by analysts in a Bloomberg poll.
During his testimony before US legislators last week, Fed chair Jerome Powell said the central bank would consider various economic data, including retail sales, ahead of the rate decision at the end of July.
“The Fed is expected to lower its interest rates regardless of the positive economic data in the US,” London Capital Group senior market analyst Ipek Ozkardeskaya said in a note.
“Powell sent a clear message to the market at his semi-annual testimony last week: the US rate cuts are primarily destined to avoid the US–China trade war from interfering with encouraging US fundamentals,” she said.
At 3.20pm the rand had weakened 0.11% to R13.9151/$ while it had firmed 0.26% to R15.6098/€ and 0.69% to R17.2852/£. The euro had weakened 0.35% to $1,1218.
Gold was last seen down 0.23% to $1,410.49/oz while platinum had gained 0.65% to $849.58. Brent crude rose 0.64% to $66.55 a barrel.