JOHANNESBURG: The rand retreated on Tuesday after data showed the U.S. economy grew at its quickest pace 11 years in the third quarter, giving a clear lift to the dollar versus emerging market currencies such as South Africa's.
At 1400 GMT, the rand was 0.50 percent weaker, fetching 11.62/dlr, after spending the session in a holding pattern in holiday-thinned trade.
The U.S. Commerce Department revised its estimate of gross domestic product growth to a 5.0 percent annual pace from 3.9 percent, citing stronger consumer and business spending than it had previously factored in.
The outlook for the rand remains bleak as portfolio investments into the stocks and bonds of Africa's most advanced economy flow outward.
"Deteriorating sentiment towards emerging markets through the course of 2014 has culminated in net outflows in portfolio investments amounting to some 10.9 billion rand (year-to-date), the first time since 2008 that South Africa has experienced outflows," ETM Analytics said in a note on Tuesday.
"Continued outflows could serve as a catalyst for the currency depreciative trend to extend," it said.
The rand has shed 5 percent in December and over 25 percent in the last 12 months against the greenback, as a record 5-month labour stoppage in the platinum sector and tepid domestic growth have dented investor sentiment.
On the domestic debt front, the benchmark issue due in 2026 was unmoved at 8.00 percent.
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