* S.Africa’s currency boosted by euro in late trade
* Q2 GDP quickens but below market expectations
JOHANNESBURG Aug 28 (Reuters) – The rand recovered from a
two-month low hit on concerns about South Africa’s growth
outlook, as a stronger euro helped the local currency to a
firmer close against the dollar in the afternoon session on
Wednesday.
Second quarter GDP undershot market expectations and the
market sees weak growth in Q3 as labour strife in the mining
sector is expected to weigh heavily on the economy.
The rand was up 0.6 percent at 8.3870 to the dollar
by 1615 GMT, recovering from a 8.4550 low earlier in the
session.
“This afternoon the rand has been firmer against most majors
on the back of commodity prices pushing higher,” said Paul
Chakaduka from Global Trader.
South Africa’s economic growth in the second quarter
quickened to 3.2 percent quarter-on-quarter led by a surprise
jump in mining, compared to 2.7 percent growth in Q1, but was
lower than expectations of 3.3 percent.
“These figures were flattered by the recovery in mining
after a particularly weak Q1. But already, given recent tragic
events, questions need to be asked about sustainability,” said
Razia Khan, head of Africa research at Standard Chartered.
The central bank is likely to keep interest rates steady in
September, waiting to see the economic impact in the third
quarter of mining labour unrest in which 44 people were killed
this month, while gold miners face pay increase demands.
Continued…
