JOHANNESBURG (Reuters) -The South African rand fell on Thursday, surrendering gains made earlier in the day after strong U.S. economic data sent the dollar up.
At 1510 GMT, the rand traded at 17.6875 against the dollar, about 0.4% weaker than its previous close after earlier trading up as much as 1.1%.
The dollar was up about 0.7% against a basket of global currencies, after U.S. data showed the economy grew faster than expected in the second quarter and new orders for key U.S.-manufactured capital goods unexpectedly rose in June.
The rand had been on the front foot in morning trade on the prospect that U.S. interest rates could have peaked after Wednesday’s widely-expected 25-basis-point hike.
The rand was little moved by local data showing South African producer inflation slowed sharply in June to 4.8% in annual terms from 7.3% in May, a bigger slowdown than analysts had expected.
Slowing inflation and the South African central bank’s decision to leave its main interest rate on hold last week have spurred buying of government bonds and contributed to the rand’s strong showing in July, with the currency up about 6% against the dollar this month.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed up over 0.8%. South Africa’s benchmark 2030 government bond was stronger, the yield down 4 basis points at 10.215%.
(Reporting by Tannur Anders; Editing by Alexander Winning and Nellie Peyton)
