Rand weakens with emerging markets

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NewRandMoney Reuters.

Cape Town - The rand declined for a second day as investors sold emerging-market currencies, overshadowing a better-than-expected increase in South African mining output.

At least 15 of 24 emerging-market currencies tracked by Bloomberg fell against the dollar today.

Mining production, which accounts for about 9 percent of South Africa’s economy and more than half of its exports, increased 12 percent in December.

That compares with a median estimate in a Bloomberg survey of six economists for growth of 4.6 percent.

President Jacob Zuma delivers his state of the nation speech to lawmakers today, three months before elections.

“The emerging-market theme will be the key of the direction of the rand rather than local data,” Vivienne Taberer, who helps manage the equivalent of more than $14 billion in fixed-income assets at Investec Plc, said by phone from Cape Town today.

“The mining data was good. We now had three days where the data was better than expected,” including retail sales, manufacturing and unemployment numbers, she said.

The rand weakened 0.8 percent to 11.0962 per dollar by 2:43 p.m. in Johannesburg.

Yields on benchmark bonds due December 2026 increased five basis points, or 0.05 percentage point, to 8.77 percent.

Unemployment in the continent’s largest economy fell to 24.1 percent in the three months through December 31 from a revised 24.5 percent the previous quarter, the statistics agency said February 11.

Data yesterday showed retail sales growth slowed to 3.5 percent in December, compared with estimates of 2.8 percent, while manufacturing expanded 2.5 percent, faster than the 2.2 percent predicted.

Foreign investors bought a net 648 million rand ($59 million) of South African bonds yesterday, paring outflows this year to 21.3 billion rand, according to JSE Ltd. data.

Foreigners sold 263 million rand of equities, the data show. - Bloomberg News

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