Market News

JOHANNESBURG, May 14 (Reuters) – The South African rand weakened against a stronger dollar on Thursday as global markets awaited the outcome of a meeting between U.S. President Donald Trump and his Chinese counterpart Xi Jinping in Beijing.

Xi told Trump that trade talks were making progress at the start of a two-day summit on Thursday, but cautioned that disagreement over Taiwan could send relations down a dangerous path and even lead to conflict.

At 1345 GMT the rand traded at 16.4499 against the dollar, down around 0.3% from its previous close.

Like other risk-sensitive currencies, the rand often takes cues from global drivers, in addition to domestic economic data.

South Africa’s mining output rose 2.5% year on year in March compared with an increase of 9.7% in February, Statistics South Africa data showed on Thursday.

The increase undershot the 4.1% predicted by analysts polled by Reuters.

“We have started to see upside pressure on mining input costs as a result of the war in the Middle East,” said Investec economist Lara Hodes in a research note.

Hodes added that depending on the length and severity of the war, the profitability of miners could remain under pressure, while they continue to contend with domestic challenges like failing water infrastructure and policy uncertainty.

On the Johannesburg Stock Exchange, the Top-40 index was last down 0.3%.

South Africa’s benchmark 2035 government bond firmed, with the yield falling 5 basis points to 8.665%.