Key points
- USD/ZAR retreats for 5th day, hovers above 12-week trough
- South Africa mining data for May awaited for clues over economic health
The South African Rand advanced for a fifth straight trading day on Thursday against the US Dollar, reaching a 12-week peak, ahead of South Africa mining production data release.
Yesterday the South African currency surged almost 2% against the greenback as global risk sentiment improved following the release of US CPI inflation data.
Annual headline CPI inflation in the US was reported to have slowed to 3% in June, while annual core CPI inflation – to 4.8%. market players considered the data as an indication that the Federal Reserve might complete its rate-hiking cycle this month.
Next, South Africa’s mining output will be a closely watched data print, with the official May figures expected at 9:30 GMT today.
Mining production increased at an annual rate of 2.3% in April, while marking the first month of activity growth after 14 successive months of decreases.
“While welcome, this outcome was partly a result of statistical factors. Overall production levels remain suppressed, … illustrative of the headwinds the industry faces,” Rand Merchant Bank analysts wrote in an investor note, cited by Reuters.
As of 9:19 GMT on Thursday USD/ZAR was edging down 0.49% to trade at 18.0475. Earlier in the session, the exotic Forex pair went down as low as 17.9915. The latter has been the pair’s weakest level since April 20th (17.9904).
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