The USD/ZAR currency pair was mostly flat on Wednesday, not far from last Friday’s 2 1/2-week high of 17.9734, ahead of South Africa’s retail sales report for May, which may provide more clues on the health of the local economy.
Yesterday data by Statistics South Africa showed mining output grew 0.2% year-on-year in May, after a 7.7% drop in April.
“Despite marginal improvements, logistics remain a significant hindrance to production, particularly in the current context of subdued commodity prices and soft demand,” Nedbank economists wrote in a note to clients.
In the US, data revealed an expected surge in consumer prices in June.
Annual CPI inflation accelerated to 2.7% in June, or the highest rate since February, from 2.4% in May.
And, annual core inflation picked up to 2.9% in June from 2.8% in May.
The data suggested tariffs were beginning to have an impact on inflation and likely prompting the Federal Reserve to leave borrowing costs on hold until September.
“Elevated uncertainty around the extent and effect of tariffs on global growth persists and remains a downside risk,” Investec economist Lara Hodes wrote in an investor note, cited by Reuters.
The USD/ZAR currency pair was last down 0.07% on the day to trade at 17.9109.
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