Rand on back foot ahead of mining, factory data

Johannesburg - The rand retreated against the dollar on Thursday, mainly tracking weaker Asian markets as investors remained concerned about the global impact of sluggish growth in China.

On the local bourse, the blue-chip Top-40 futures index was down 0.64%, a move likely to translate in the actual share index opening 283 points lower at 09:00.

Stuttering output in the world's second largest economy has pushed commodity prices lower, hitting emerging markets like South Africa that export to the world's second-largest economy.

Traders and analysts said mining and manufacturing production data due out at 11:30 and 13:00 would provide key pointers on whether the domestic economy could be headed for a recession after contracting in the second quarter.

At 08:49 the rand traded 0.44% softer at R13.8600/$ compared with Wednesday's close in New York.

The rand has lost nearly 20% of its value against the dollar since the start of the year, victim to concerns about lacklustre domestic growth and a general sell-off in emerging markets as US interest rates are set to rise this year.

"Heightened global risk aversion, a reduction in the rand's carry appeal, price action, seasonality trends and waning portfolios suggest that the rand remains vulnerable even in the short term," Barclays Africa strategist Mike Keenan said.

Government bonds were similarly weaker, with the yield for the 2026 benchmark climbing 5.5 basis points higher to 8.53%.