Updates prices, adds stocks
JOHANNESBURG, Sept 10 (Reuters) – South Africa’s rand weakened on Thursday as data showing contractions in mining and manufacturing in July pointed to a slow recovery in the domestic economy.
At 1540 GMT the rand ZAR=D3 was 1.59% weaker at 16.8800 per dollar.
Statistics South Africa agency figures showed on Thursday that mining output fell 9.1% in July while manufacturing was down 10.6%.
On the other hand, the central bank said that the current account balance swung to a deficit in the second quarter as the trade surplus more than halved due to the impact of the COVID-19 pandemic.
“South Africa’s weakening economic fundamentals have dragged down the rand,” Investec economist Annabel Bishop said in a research note.
“Concerns over the future of domestic economic growth are also limiting the rand from gaining fully from positive global financial market sentiment.”
Data on Tuesday showed that South Africa’s economic output recorded its largest contraction ever in the second quarter as a strict lockdown shut down most activity.
Government bonds also weakened, with the yield on the instrument due in 2030 ZAR2030= up 5.5 basis points to 9.335%.
Stocks rose along with global markets, with the bullion sector .JGLDX up 2.78% after spot gold rose to its highest level in over a week.
Gold Fields GFIJ.J rose 1.47% to 221.51 rand and AngloGold Ashanti closed up 3.82% to 493.35 rand.
Further gains were seen by bourse heavyweight Naspers NPNJn.J which rose 2% to 2,940.02 rand.
The Johannesburg Stock Exchange’s All-Share Index .JALSH rose 1.61% to 56,100 points, its highest level in more than a week, while the blue-chip Top-40 index .JTOPI gained 1.67% to 51,688 points.
(Reporting by Olivia Kumwenda-Mtambo and Tanisha Heiberg; Editing by Andrew Cawthorne)
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