The rand weakened, retreating from a five-week high against the dollar, before the release of data that may show mining output in Africa’s biggest economy contracted for a third month. Bonds advanced for a second day.
Mining output declined 6.1% in July, compared with a contraction of 6.2% the previous month, according to the median estimate of three economists in a Bloomberg survey.
Metals and other commodities account for more than 50% of South Africa’s exports. Federal Reserve policy makers may give guidance next week on plans to scale back the pace of its $85-billion in monthly bond buying.
"Internationally, markets have been dominated by declining fears of tapering and declining risks of a military strike on Syria," said John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg. "Emerging- market and risk currencies, however, have battled."
South Africa’s currency declined 0.7% to 9.94 per dollar as of 11:20 am in Johannesburg on Thursday, retreating from a 1.1% gain on Wednesday.
Yields on benchmark 10.5% bonds due December 2026 dropped four basis points, or 0.04 percentage point, to 8.20%.
The currency was bolstered on Wednesday by South African data that showed manufacturing growth accelerated more than estimated in July as the rand's 15% decline against the dollar this year boosted revenue for exports. – Bloomberg