Cape Town - The rand weakened, retreating from a five-week high against the dollar, before the release of data that may show mining output in Africa’s biggest economy contracted for a third month.
Bonds advanced for a second day.
Mining output declined 6.1 percent in July, compared with a contraction of 6.2 percent the previous month, according to the median estimate of three economists in a Bloomberg survey.
Metals and other commodities account for more than 50 percent of South Africa’s exports.
Federal Reserve policy makers may give guidance next week on plans to scale back the pace of its $85 billion in monthly bond buying.
“Internationally, markets have been dominated by declining fears of tapering and declining risks of a military strike on Syria,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments.
“Emerging-market and risk currencies, however, have battled.”
South Africa’s currency declined 0.7 percent to 9.9413 per dollar as of 11:20 a.m. in Johannesburg, retreating from a 1.1 percent gain yesterday.
Yields on benchmark 10.5 percent bonds due December 2026 dropped four basis points, or 0.04 percentage point, to 8.20 percent.
The currency was bolstered yesterday by South African data that showed manufacturing growth accelerated more than estimated in July as the rand’s 15 percent decline against the dollar this year boosted revenue for exports. - Bloomberg News