South Africa's rand falls ahead of GDP data

JOHANNESBURG: South Africa's rand weakened against the dollar early on Tuesday, ahead of gross domestic product (GDP) figures expected to show that economic growth slowed in the first quarter of this year.

At 0615 GMT, the rand traded at 13.5500 against the dollar, 0.11% weaker than its previous close and pulling further away from 28-month high of 13.4150 hit on Monday.

Investors await GDP numbers for the first quarter due to be released at 0930 GMT. Economists polled by Reuters expect annualised growth to have skidded to 2.5% from 6.3% in the previous quarter.

"The rand is only likely to be affected by this backwards glance if the results deviate significantly from expectations. It had continued to appreciate recently driven by global economic optimism, the boom on many commodity markets and not least rate hike expectations," Elisabeth Andreae, FX and EM analyst at Commerzbank wrote in a note.

"However, the air is likely to get thinner for the rand now. The prospect of a further recovery of the struggling economy, which had shrunk by 7% during the pandemic year, is not exactly rosy."

In fixed income, the yield on the benchmark government bond due in 2030 was up 0.5 basis point to 8.755% in early deals.