Rand edges weaker in subdued start to trade

12 June 2019 - 12:34
By Reuters
Image: Stock Photo

The rand edged weaker on Wednesday in a slow start that saw subdued flows as market makers looked for clear breaches either side of key technical levels.

At 0650 GMT, the rand was 0.14% weaker at 14.6950 per dollar compared to a close of 14.6750 overnight in New York.

In the previous session the rand rallied as much as one percent through the 14.80 technical support level, spurred by improving demand for emerging currencies and a better-than-anticipated manufacturing production print.

But it flagged in the latter stages of offshore trade with investors eyeing the commercial spat between Washington and Beijing and seeking clear direction for the rand as political risk fears from the previous week continued to dissipate.

"Yesterday's local data, which was for a period after the (electricity) load shedding, provided a glimmer of hope that the local economy has some potential for recovery, although it still lags emerging-market peers," said analysts at Nedbank in a note.

Manufacturing output in April grew by a consensus-beating 4.6% year-on-year, according to Statistics South Africa, as industries blighted by the nationwide power outages of the first quarter bounced back sharply.

The statistics agency publishes April retail sales at 1100 GMT in the only scheduled local data release for the session, while inflation numbers from the United States will also be on investors' radar.

Bonds opened firmer, with the yield on the benchmark paper due in 2026 down 2 basis points to 8.31%.