A South African Rand coin is seen in this illustrated photo taken on October 28, 2020.Reuters/Mike Hutchings/Illustration/File Photo Obtaining license rights
JOHANNESBURG, Sept 14 (Reuters) – The South African rand firmed against the dollar on Thursday after analysts expected an increase after monthly mining data showed a decline in production. It fell in comparison.
The rand was trading at 18.9425 rand against the dollar at 1502 GMT, down about 0.7% from the previous close.
The dollar rose about 0.4% against a basket of global currencies.
South Africa’s total mining production fell by 3.6% year-on-year in July, after increasing by a revised 1.3% in the previous month, according to Statistics South Africa data. Analysts polled by Reuters had expected a 0.5% rise in July.
“This divergence raises concerns about the export outlook and has a negative impact on the value of the rand,” said Sean Murison, senior market analyst at IG.
However, he said the strength of the dollar was a bigger factor in the rand’s decline.
The dollar hit a six-month high on Thursday after mostly better-than-expected economic data and the European Central Bank signaled an end to its rate hike cycle.
With nothing else on the economic calendar for the rest of the week, South African investors will focus on next week’s local inflation data and the central bank’s interest rate decisions.
Analysts polled by Reuters expect the South African Reserve Bank to keep interest rates unchanged at its Sept. 21 meeting.
South Africa’s benchmark 2030 government bond yield fell, with the yield rising 3.5 basis points to 10.440%.
Johannesburg Stock Exchange shares closed higher, with the broader All Shares Index (.JALSH) up 1.43% and the Blue Chip Top 40 Index (.JTOPI) up 1.52%.
Reporting by Bhargav Acharya and Nellie Peyton.Editing: David Goodman and Richard Chan
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