Rand rises despite poor retail sales data

THE RAND advanced against the dollar yesterday despite disappointing local retail sales data, as the greenback fell from a one-week high.

The rand was bid at R9.9345 to the dollar at 5pm yesterday, up 4.68c from the same time on Tuesday. It breached the psychologically key R10 level to hit R10.018 earlier in the session.

The dollar slipped from a one-week high hit on Tuesday after upbeat US retail sales data pointed to an improving American economy.

Although South Africa’s retail sales growth disappointed yesterday, this had less of an effect on the rand, traders said.

Growth in South Africa’s retail sales was 1.9 percent year on year in June from a revised 6 percent in May. Economists polled by Reuters had expected year-on-year sales growth of 3 percent in June from 6.2 percent previously reported in May.

“It’s not attributed much to the local data. It’s more the dollar giving up some of its recent gains,” Absa Capital foreign exchange trader Duncan Howes said.

“In the bigger picture, it’s a relatively small move and we continue to be rangebound in the R9.80 to R10.05 area.”

Howes said the rand was likely to trade within that range for the next couple of weeks although the currency remained vulnerable to local labour unrest.

Government bonds were slightly firmer.