JOHANNESBURG (Reuters) -The South African rand fell on Wednesday after data showing a surprise drop in retail sales fuelled worries of consumers curbing their spending habits in the face of rising inflation and as frequent power cuts limited industry-wide activity.
At 1530 GMT, the rand traded at 16.6775 against the dollar, 1.66% weaker than its previous close.
South African June retail sales fell 2.5% year on year in June, while analysts polled by Reuters expected a 0.4% increase compared to a 0.1% rise in May.
Meanwhile, state utility Eskom said it would extend rolling power cuts to Wednesday and Thursday evenings due to a shortage of generation capacity.
“Retailers have been plagued by longer delivery lead times and electricity disruptions … declining real disposable incomes on high inflation and rising interest rates have negatively affected consumer expenditure,” Investec analyst Lara Hodes said in a research note.
The dollar index was up at 106.76 after briefly hitting a session high earlier as data showed that U.S. consumer spending was steady in July.
The Fed minutes, due around 1800 GMT, should shed more light on the U.S. interest rate trajectory and be a major driver across global markets.
Stocks on the Johannesburg Stock Exchange (JSE) ended lower, weighed down by resources and mining sector companies after oil hit a six-month low earlier in the day. Miner Sibanye Stillwater Ltd ended 5.87% lower after it warned that its half-year profit was expected to halve.
Sibanye had been punished by the market for below-consensus H1 earnings, but the reaction seemed severe, said Roy Topol, portfolio manager at Cratos Asset Management.
Overall on the JSE, the All-Share index fell 0.75%, while the Top-40 index closed 0.86% lower.
The South African government’s benchmark 2030 bond fell, with the yield up 9 basis points at 10.170%.
(Reporting by Alexander Winning, Bhargav Acharya and Nelson Banya; Editing by Edmund Blair and Anil D’Silva)
