JOHANNESBURG (Reuters) -The South African rand firmed on Tuesday after the release of better-than-expected local mining production figures and as U.S. data showed rising inflation in June in the world’s largest economy.
At 1311 GMT, the rand traded at 17.7775 against the dollar, 0.7% firmer than Monday’s close.
South Africa’s mining output rose 0.2% year-on-year in May compared with a decrease of 7.7% in April, Statistics South Africa data showed earlier on Tuesday.
Analysts polled by Reuters and Nedbank economists expected production to have fallen 5.4% and 2.1% respectively this time around.
“Despite marginal improvements, logistics remain a significant hindrance to production, particularly in the current context of subdued commodity prices and soft demand,” Nedbank economists said in a research note.
“Elevated uncertainty around the extent and effect of tariffs on global growth persists and remains a downside risk,” Investec economist Lara Hodes said in a note.
The greenback was trading flat against a basket of currencies in latest trading on Tuesday after the U.S. Labor Department reported an expected rise in U.S. consumer prices in June.
That could mark the start of a long-anticipated, tariff-induced increase in inflation that has kept the U.S. Federal Reserve cautious about resuming its interest rate cuts.
In South Africa, domestic investors will look to May retail sales data on Wednesday for further clues into the health of the continent’s most industrialised economy.
The Johannesburg Stock Exchange’s Top-40 index was last up 0.7%.
South Africa’s benchmark 2035 government bond also firmed, with the yield down 5 basis points to 9.835%.
(Reporting by Sfundo Parakozov;Additional reporting by Siyanda Mthethwa; Editing by Andrew Heavens and Aidan Lewis)
