South African rand pulls back on domestic growth worries

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JOHANNESBURG (Reuters) – South Africa’s rand retreated from 10-week highs against the dollar on Wednesday, as nagging worries about domestic growth offset the boost from a generally risk-on global environment.

Stocks were set to open a touch firmer, with the Top-40 futures index of the JSE securities exchange edging up 0.3 percent.

The rand traded at 14.4225 to the greenback by 0859 GMT, down 0.57 percent from Tuesday’s close at 14.3410.

The currency had climbed to 14.2755 on Tuesday, its strongest since May 3, partly buoyed by a surprise jump in local manufacturing output.

The outlook for the economy, however, still remains downbeat, raising the risk of credit rating cuts before the end of the year. The IMF has cut its growth forecast for 2016 to 0.1 percent from the 0.6 percent predicted in May.

South African government bonds also dipped on Wednesday, and the yield for debt due in 2026 added 1.5 basis points to 8.675 percent.

 

(Reporting by Stella Mapenzauswa; Editing by Toby Chopra)

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