South African rand firms after strong trade data, shares fall - Reuters

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A street trader counts out change for a customer in Durban, file. REUTERS/Rogan Ward

JOHANNESBURG, June 30 (Reuters) - The South African rand firmed on Wednesday after data showed the country recorded larger-than-expected trade surplus for the month of May.

At 1500 GMT, the rand traded at 14.2666 against the dollar, 0.55% stronger than its previous close.

The currency mirrored gains in most emerging market currencies, with traders eyeing U.S. jobs data due later this week for clues on the economic recovery there and the Federal Reserve's stance.

Data from the South African Revenue Service showed on Wednesday that the trade surplus widened to 54.60 billion rand ($3.83 billion) in May from a surplus of 51.25 billion rand in April, as exports rose and imports fell. Market expectations were for a trade surplus of 46.50 billion rand.

South Africa's economic recovery from the COVID-19 pandemic has been uneven and halting, but one bright spot has been bumper commodity prices which have improved the country's terms of trade.

"We expect the trade surplus to remain robust throughout the year, albeit declining as we go along. Commodity prices are expected to remain at current levels over the immediate term, before declining towards pre-pandemic levels over the medium term," said Pieter du Preez at NKC African Economics.

Stocks continued to vacillate wildly between losses and gains since Monday as investors weighed whether an impact of rising cases of coronavirus would dent the economy more or a strong job data from the U.S. would give a deeper boost.

After rising by more than a percentage on Tuesday, stocks pared half of the gains on Wednesday with the benchmark all-share index closing down 0.45% to 66,249 points.

The blue-chip index of top 40 companies (.JTOPI) shed 0.55% to end the day at 60,162 points.

Stocks of banks and financials, which largely depend on the local economy, however stayed resilient hinting that most of the day's losses were largely in lock step with fall in global stock markets.

"The bank index (.JBANK) was up 0.44% at close of trading hours.

Government bonds firmed alongside the currency, with the yield on the benchmark 2030 instrument falling 6.5 basis points to 8.895%.

($1 = 14.2583 rand)

Reporting by Olivia Kumwenda-Mtambo and Promit Mukherjee; Editing by Nick Zieminski

Our Standards: The Thomson Reuters Trust Principles.

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South African rand firms after strong trade data, shares fall - Reuters
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