South African rand weakens against stronger dollar

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South African rand weakens against stronger dollar

7:42 CAT | 31 Aug 2023

File photo: Reuters

South Africa’s rand weakened on Thursday against a stronger dollar as data painted a mixed picture of the U.S. economy.

At 1544 GMT, the rand traded at 18.9300 against the dollar ZAR=D3, nearly 1.3% weaker from its previous close.

South Africa’s July producer inflation ZAPPIY=ECI and trade figures ZATBAL=ECI did little to prop up its currency, with the rand taking cues from the stronger dollar.

South Africa recorded a trade surplus of 15.96 billion rand ($849.53 million) in July, revenue service figures showed, while the statistics agency said the country’s producer inflation slowed to 2.7% year on year in July from 4.8% in June.

The dollar index =USD was last up nearly 0.6% against a basket of other major currencies.

U.S. consumer spending accelerated in July with an 0.8% increase, but slowing inflation fuelled expectations that the Federal Reserve would leave interest rates unchanged next month.

Shares on the Johannesburg Stock Exchange fell, with the blue-chip Top 40 index .JTOPI closing 0.34% lower.

South Africa’s benchmark 2030 government bond ZAR2030= fell, sending its yield up 7 basis points to 10.275%.

Source: Reuters