South African rand weakens against stronger dollar; shares rise

JOHANNESBURG (Reuters) -The South African rand weakened against a stronger U.S. dollar on Wednesday despite better-than-expected local retail sales data.

At 1512 GMT, the rand traded at 18.2400 against the dollar, 0.14% weaker than its previous close.

The dollar was up around 0.3% against a basket of major currencies.

It gained after U.S. retail sales fell less than expected in October, bouncing off its biggest drop in a year the previous day.

Like other risk-sensitive currencies, the rand often takes its cues from global drivers such as U.S. monetary policy.

Locally, Statistics South Africa data showed a 0.9% increase in year-on-year retail sales in September. Analysts polled by Reuters had expected a 0.1% rise.

Investec analyst Lara Hodes said in a research note that consumers remained constrained despite September’s modest lift.

“While fuel price cuts in November and likely December should offer consumers some reprieve, interest rates are likely to remain elevated for longer, weighing on the indebted,” Hodes said.

On the Johannesburg Stock Exchange the blue-chip Top-40 and the broader all-share index ended the day around 2% higher.

South Africa’s benchmark 2030 government bond was stronger in late deals, with the yield down 3 basis points to 10.205%.

(Reporting by Tannur Anders and Anait Miridzhanian; Editing by Andrea Ricci)