South African rand edges higher against dollar

JOHANNESBURG (Reuters) -The South African rand edged higher on Wednesday, reversing some of the losses incurred the previous day after its biggest trading partner China cut key policy rates.

At 1538 GMT, the rand traded at 19.0750 against the dollar, over 0.3% stronger than its previous close.

The rand had weakened earlier this week on mounting worries over the health of China’s economy.

The dollar last traded around 0.02% weaker against a basket of global currencies.

The rand was little moved by Statistics South Africa data showing the country’s retail sales fell 0.9% year on the year in June after declining by a revised 1.6% in May. Analysts polled by Reuters expected a decline of 0.2% year on year.

“Consumers remain financially constrained dealing with elevated living costs, high interest rates and accordingly lower purchasing power,” Investec analyst Lara Hodes said in a research note.

Retail sales have contracted in annual terms every month since December 2022, with rolling power blackouts a contributing factor.

Shares on the South African Stock Exchange fell, with the blue-chip Top-40 index ending 1% lower. South Africa’s benchmark 2030 government bond was marginally stronger in early deals, with the yield down 1 basis point to 10.345%.

(Reporting by Tannur Anders and Bhargav AcharyaEditing by Alexander Winning and Barbara Lewis)