JOHANNESBURG: South Africa's rand firmed against the US dollar on Wednesday after data showing inflation quickened in June boosted the case for domestic interest rates remaining high this year.
Stocks were largely unchanged with mining firms among the biggest losers on weak production results while budget retailer Shoprite led the risers on strong sales.
At 1500 GMT, the rand traded at 14.2700 per dollar, 0.42 percent firmer from its New York close on Tuesday. South Africa's headline inflation pulled further away from the central bank's target range of 3-6 percent, quickening to 6.3 percent year-on-year in June from 6.1 percent in May.
The South African Reserve Bank's Monetary Policy Committee (MPC) will announce its interest rates decision on Thursday. Analysts expect the central bank to keep the repo rate on hold at 7 percent but add 25 basis points in November as wage talks and higher food prices threaten to stoke inflation.
"In the absence of any surprise concerns from the SARB, the rand will remain biased towards gaining, driven by global money searching for yield," Rand Merchant Bank analyst Isaah Mhlanga said.
On the bourse, the benchmark Top-40 index dipped 0.03 percent to 46,200 points while the All-Share index weakened 0.1 percent to 52,837 points. Kumba Iron Ore fell 6.37 percent following a 15 percent decrease in production, while Anglo American Platinum dropped 8.23 percent after its second quarter production fell 8 pct.
"These mining shares have come off quite tremendously. We have seen some production numbers which the market looked at in a bit of a negative light," said Afrifocus Securities portfolio manager Ferdi Heyneke.
Bourse losses were curbed by the retail sector. Shoprite gained 11.35 percent to reach a three year high after flagging first year sales up 14.4 percent to 130 billion rand.
On the bond market, government bonds firmed, and the yield for the benchmark instrument due in 2026 dipped 3 basis points to 8.79 percent.
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