Rand steady despite dollar rally

‘Locally there is nothing to drive the rand stronger’.

South Africa’s rand steadied on Wednesday in the face of a global dollar rally after poor domestic data knocked it to two-week lows in the previous session.

At 23h58 the rand was trading at 12.0499 to the dollar, little changed from its previous close.

“The excitement for the rand is over for a bit because we had the GDP numbers this week and the rate decision and inflation numbers last week,” said Christie Viljoen of NKC African Economics.

“But locally there is nothing to drive the rand stronger, the GDP and employment numbers confirmed the negative mood.”

First quarter indicators released by South Africa’s statistics agency showed the economy expanded by only 1.3% in the first quarter, slower than expected, while the jobless rate worsened.

The dollar remains globally on the upswing, soaring to a fresh eight-year high against the yen on Wednesday and gaining ground against other major currencies on expectations the Federal Reserve will raise interest rates later this year.

Government bonds firmed slightly, with the paper due in 2026 shedding 2.5 basis points to 8.15%.

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