JOHANNESBURG (Reuters) -The South African rand extended its gains on Wednesday, boosted by a weaker dollar after the release of a domestic business confidence index and retail sales figures.
At 1310 GMT, the rand traded at 17.54 against the dollar, about 0.4% firmer than its previous close, after strengthening more than 1% on Tuesday.
The dollar last traded 0.2% weaker against a basket of currencies.
“With the U.S. expecting further rate cuts and some dollar weakness, it is difficult to see where a sudden bout of weakness in the rand will happen, bar the scoring of local own goals,” Wichard Cilliers, head of market risk at TreasuryONE, said.
“However, the markets are on a knife-edge, and headlines will drive markets in the short term,” Cilliers added.
The South African Chamber of Commerce and Industry reported a rise in the country’s business confidence in July, helped by higher new vehicle sales, rising manufacturing output, strong precious metals prices and well-contained inflation.
Separately, Statistics South Africa figures showed on Wednesday that retail sales rose 1.6% year-on-year in June after rising by a revised 4.3% in May.
The Johannesburg Stock Exchange’s Top-40 index was last up 1.2%.
South Africa’s benchmark 2035 government bond was also stronger, with the yield down 4.5 basis points to 9.62%.
(Reporting by Sfundo Parakozov; Editing by Andrew Heavens and Alex Richardson)
