South African rand extends losses on weak China data

JOHANNESBURG (Reuters) -South Africa’s rand slipped again on Tuesday as weak economic data from China kept investors away from risk-sensitive currencies.

At 1506 GMT, the rand traded at 19.0025 against the dollar, down around 1.6% from its previous close. The currency has lost more than 6% against the greenback this month.

The dollar last traded around 0.56% stronger at 102.65 against a basket of global currencies.

“Granted, the rand is one of the worst emerging-market performers, but much of this can be attributed to the fact that it is among the most liquid emerging-market currencies and thus when global sentiment turns, it is one of the first to feel the pressure,” said Rand Merchant Bank analysts in a research note.

Chinese data showed on Tuesday that both imports and exports fell more than expected, pointing to softening global demand.

“A global slowdown may encourage major developed markets’ central banks to ease off their tightening, but it also means the possibility of financial market volatility and a rise in risk aversion,” ETM Analytics said.

With little local data and a public holiday on Wednesday, traders will turn their attention to Chinese and U.S. inflation data due later this week.

Local contributors to rand weakness include an ongoing minibus taxi strike in South Africa’s Western Cape province, leaving some commuters unable to work, local media reported.

“Investors will carefully monitor developments concerning the taxi strike and the violence generated. The quicker this strike ends, the quicker the rand will experience less depreciative pressure,” ETM added.

On the Johannesburg Stock Exchange, the blue-chip Top 40 index closed around 0.34% weaker.

South Africa’s benchmark 2030 government bond was slightly stronger, with the yield 3 basis points lower at 10.215%.

(Reporting by Tannur Anders with additional reporting by Bhargav Acharya; Editing by Anait Miridzhanian, Kirsten Donovan, Alexander Smith and Jonathan Oatis)