By Anathi Madubela and Sfundo Parakozov; Reuters.
The South African rand weakened on Wednesday, pressured by a stronger dollar that overshadowed domestic inflation and retail sales figures released by the country’s statistics agency.
At 1446 GMT, the rand traded at 16.07 against the dollar , down 0.3% from Tuesday’s close, while the U.S. dollar index gained 0.3% against a basket of currencies ahead of the Federal Reserve’s January meeting minutes, expected later in the day.
The rand often takes cues from global drivers such as U.S. policy in addition to domestic economic data.
South Africa’s annual inflation rate edge down to 3.5% in January from 3.6% in December, slightly above Reuters economists’ forecast of 3.4% but below a prediction of 3.6% by Nedbank economists.
Analysts expect inflation to remain subdued, keeping the door open for more interest rate cuts by the central bank.
Retail sales rose 2.6% year-on-year in December, missing Reuters’ poll estimates of 3.1%.
Separately, a gauge of South African business confidence edged lower in January, data showed on Wednesday, but it remained at a high level after a significant improvement last year.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index, climbed more than 2%. South Africa’s benchmark 2035 government bond slipped, with the yield rising 4 basis points to 7.955%.