South African rand dips against dollar, mining data disappoints

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South Africa’s rand edged lower on Thursday, after poor mining and industrial production data dampened investor confidence, and the dollar bounced back ahead of U.S. inflation data.

At 1654 GMT, the rand traded at 15.4500 against the dollar, 1.01% lower than its previous close.

The dollar index strengthened against its rivals, reversing initial declines and was up 0.45% at 103.03, ahead of the U.S. May consumer price index (CPI) data on Friday.

South Africa’s total mining output fell by 14.9% year on year in April, while manufacturing output dropped 7.8%, data from the statistics agency showed.

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“Logistical challenges which were exacerbated by the KZN floods in April, together with electricity supply constraints continue to weigh on the energy-intensive mining sector, impeding optimal production and export potential,” Investec economist Lara Hodes said in a research note, adding that the manufacturing sector was also extremely vulnerable to the electricity supply situation.

Separately, data from the central bank showed the country’s current account surplus widened slightly to 2.2% of gross domestic product (GDP) in the first quarter from 2.1% of GDP in the final quarter of 2021.

On the Johannesburg Stock Exchange (JSE), stocks had a broad-based fall, triggered by a global downward trend in stocks as investors focused on an ECB rate hike and rising bond yields in the U.S.

Overall on the JSE, the All-Share index fell 1.49% to 68,911 points while the Top-40 index closed 1.61% lower at 62,427 points. The mining index slumped 3.23%, with Anglo American Platinum Ltd and Northam Platinum Holdings Ltd down 4.39% and 4.13% respectively.

The government’s benchmark 2030 bond was lower, with the yield up 3.5 basis points to 9.980%. (Reporting by Anait Miridzhanian in Gdansk ans Bhargav Acharya in Bengaluru; Editing by Hugh Lawson and Bernadette Baum)

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