June 21, 2018 / 6:57 AM / 3 months ago

South African rand retreats before current account data released

JOHANNESBURG, June 21 (Reuters) - South Africa’s rand retreated early on Thursday before the release of first-quarter current account data, giving back the previous session’s gains as global concern over a simmering trade war resumed.

* At 0630 GMT the rand was 0.73 percent weaker at 13.7475 per dollar, sliding back from Wednesday’s 13.5600 as an emerging-market recovery petered out.

* “We believe the risk-on phase of the last two years is over,” said strategists at Nedbank Newels Heyneke and Mehul Daya in a note. * The dollar resumed its rally, surging to near an 11-month high against a basket of currencies. * While the rand stopped short of the 14.00 mark in a prolonged slide in June, with some traders using 13.9150 as a short target instead, the currency is expected to remain under pressure from external pressures and an uneven economic recovery locally. * The Reserve Bank publishes first-quarter current account data at 0800 GMT. The deficit is forecast to widen to 3.8 percent, a reminder of the country’s vulnerability to portfolio outflows that is likely to feed bearish sentiment.

* The yield for the benchmark government bond due in 2026 was up 3.5 basis points in early trade to 9.06 percent.

* Stocks were expected to open flat, with the JSE Top-40 futures index up only 0.1 percent. (Reporting by Mfuneko Toyana, editing by Larry King)

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