JOHANNESBURG (Reuters) - South Africa’s rand nudged lower on Wednesday on increased importer demand and data showing that the country’s trade gap widened due to lower mining exports.
The rand was at 8.7010 to the dollar at 1458 GMT on Wednesday, down 0.6 percent from Tuesday’s New York close.
South Africa’s trade deficit widened to 13.8 billion rand in September after a 12.2 billion rand shortfall in August, the South African Revenue Service said on Wednesday.
Economists surveyed by Reuters had expected a shortfall of 10 billion rand for September due to lower mining exports as a wave of strikes that began in August has reduced output in the sector.
“The rand weakened today on the fact that there’s a lot of importer demand as we get closer to the 8.60 level, not helped by the trade data,” said Brigid Taylor, head of institutional sales at Nedbank. “The data does point to the fact that we can expect to see pressure come through on the current account.”
Taylor said she expect the rand to trade in the 8.60-8.80 range for the time being.
“The rand remains on a negative bias,” she said. “Whilst that is in play we’re targeting 8.80.”
Government bonds were slightly firmer, with yields on the 3-year and 14-year instruments 1.5 basis points lower at 5.475 percent and 7.73 percent respectively.