Rand Snaps Two-Day Gain Against Dollar as China Imports Slow
The rand snapped two days of gains against the dollar after Chinese imports unexpectedly fell, adding to signs of slowing global growth and cutting appetite for riskier emerging-market assets.
South Africa’s currency depreciated as much as 0.6 percent before weakening 0.1 percent to 8.1808 a dollar as of 3:41 p.m. in Johannesburg. Yields on the nation’s 6.75 percent bonds due 2021 declined one basis point, or 0.01 percentage point, to 6.59 percent.
Imports by China, the biggest buyer of South African raw materials, slid 2.6 percent in August from a year earlier. That compares with a median analyst estimate of a 3.5 percent rise. Gold fell for the first time in three sessions in New York as the dollar rose on Greece’s struggles to qualify for aid payments.
“We started off pretty poorly with this morning’s Chinese trade figures confirming expectations of weakness in the economy,” John Cairns and Josina Solomons, strategists at Rand Merchant Bank in Johannesburg, said in an e-mailed note today.
South Africa’s inclusion next month in Citigroup’s World Government Bond Index is luring money managers overseeing more than $2 trillion who use the gauge to measure their performance.
Foreign investors bought a net 5.8 billion rand ($708 million) of South African bonds last week, according to JSE Ltd. data. Foreigners have bought 74 billion rand of the nation’s debt this year, more than in any other year since Bloomberg started compiling the data in 1996.
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