File Photo: IOL

JOHANNESBURG – The rand retreated on Thursday as minutes from the US Federal Reserve’s September meeting striking a hawkish tone bolstered the dollar and dampened some of the enthusiasm for emerging currencies.

Stocks weakened for a third session, in line with emerging markets, which were hampered by Chinese stocks tumbling to four-year lows.

The minutes from the meeting showed every Fed policymaker backed raising interest rates, pushing the dollar index to its firmest in a week and knocking emerging currencies that had befitted from a return of carry trade action.

“The rand has looked past local data of late and is just tracking the other emerging market currencies. You would have thought that the weaker mining numbers would have had a bigger effect,” said Jan Sluis-Cremer, forex trader at Rand Merchant Bank.

Mining production figures released on Thursday morning showed that total mining output had fallen 9.1 percent year on year in August, worse than consensus expectations of a 4 percent contraction.

The yield on the benchmark 2026 paper was flat at 9.165 percent.

In equities, the all share index and the blue chip top 40 index were both down 0.49 percent at 52 133 points and 45 936 points respectively.

Banks fell 0.46 percent and bourse heavyweight Naspers was 1.17 percent lower at R2 725.

The emerging-market shares fell as Chinese stocks tumbled to four-year lows. The US is leaning on import tariffs to try to cut a trade deficit with China.

“With talk of raising rates with the Fed and trade wars still hanging over everyone’s head, emerging markets are still not exactly the flavour of the month. The risk off sentiment and volatility persists,” said Ryan Woods, equities trader at Independent securities.

Private hospital group Mediclinic extended its previous day’s losses, dropping by a further 7.80 percent to R68.19 after it flagged an 8 percent drop in core profit for the first six months of the year.