Rand depreciates as the dollar strengthens as China's economic recovery weakens
The rand was trading at R16.25 per dollar in early trade, down more than 0.3% from the previous close. The rand fell in early trade on Monday as the US dollar gained ground on global markets.
In a week with little domestic economic data, analysts believe the rand would be influenced by global factors such as the outlook for US monetary policy and China's slow economic recovery.
The dollar was up by 0.1% versus a basket of currencies as traders evaluated aggressive statements from Federal Reserve policymakers against signals that US inflation may have peaked.
The Fed's minutes on Wednesday will be scrutinized for more hints regarding the US interest rate trajectory.
Also on Wednesday, South Africa's June retail sales numbers will shed more light on the economy's second-quarter performance.
China's slow economic recovery
At the same time, China's economic recovery unexpectedly slowed in July as new Covid outbreaks around the country weighed on consumer and business expenditure, further clouding the growth outlook and prompting the central bank to issue a surprise interest rate decrease.
The National Bureau of Statistics of China reported Monday that industrial production increased 3.8% year on year, down from 3.9% in June and missing economists' forecast of a 4.3% gain. In retail sales, retail sales increased at a slower-than-expected 2.7%, while fixed asset investment increased at a slower-than-expected 5.7% in the first seven months of the year, falling short of the 6.2% predicted by economists.
The surveyed unemployment rate dropped to 5.4% from 5.5%. However, independent high-frequency statistics indicate that the economy's recovery is far from certain. Truck flows, a proxy for economic output, were much lower in July than at the same time last year, while home sales fell last month compared to the previous year.
