World Markets

South Africa's rand steady as investors weigh GDP slide

Credit: REUTERS/Siphiwe Sibeko

South Africa's rand was steady early on Wednesday, recovering some of the ground it lost in the previous session after the economy contracted in the third quarter.

JOHANNESBURG, Dec 4 (Reuters) - South Africa's rand was steady early on Wednesday, recovering some of the ground it lost in the previous session after the economy contracted in the third quarter.

At 0720 GMT, the rand ZAR=D3 was 0.05% firmer at 14.6310 per dollar, having slipped to a session-low of 14.6980 on Tuesday as the 0.6% contraction to gross domestic product (GDP) snapped the currency's four-session winning streak.

A Reuters poll of analysts had forecast a marginal 0.1% quarter-on-quarter expansion.

A broad slowdown in Africa's most advanced economy, led by mining, manufacturing and agriculture, have reignited fears of credit downgrades, spooking investors that have been lured in by the currency's high yield.

Traders said nervousness around global growth and the ongoing trade war between China and the United States would keep the rand on the backfoot.

"The rand/dollar still has the potential to test the lower bounds of its current trading range, though the status quo of 14.60 should sustain," said analyst at RMB Nema Ramkhelawan-Bhana.

U.S. President Donald Trump warned on Tuesday that a trade deal with China might not be in place until after the 2020 U.S. presidential election, hurting risk-demand already reeling after the United States said it would restore tariffs on metal imports from Brazil and Argentina.

Bonds were firmer, with the yield on the benchmark 2026 debt ZAR186= down 2 basis points at 8.465%.

(Reporting by Mfuneko Toyana; Editing by Jacqueline Wong)

((mfuneko.toyana@thomsonreuters.com; +27117753153; Reuters Messaging: mfuneko.toyana.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More