Rand softens, traders eye Eskom woes

Johannesburg - The rand was on the back foot against the US dollar on Wednesday, driven lower by global market movements and as investors worried about the impact of domestic electricity shortages on a struggling economy.

Retail sales data due out at 13:00 should provide the latest clue on the state of the economy and whether the Reserve Bank has scope to raise interest rates next month.

At 08:55, the local unit traded at R12.0300/$, a touch softer than its R12.0095 close in New York on Tuesday.

Government debt also edged lower, with the benchmark 2026 instrument yielding 7.73%, up half a basis point from the previous day.

Concerns about power constraints and renewed labour tension remained elevated, although this has not yet had a direct impact on the market, RMB analyst Carmen Nel said.

"For now the focus remains offshore, with US and eurozone data and policy the main drivers of the rand and local rates," Nel added.

The dollar took back some ground lost against a basket of major currencies after a surprisingly weak US retail sales report.