The volatile rand weakened in late afternoon trade on Thursday to breach six-month worst levels as it struck 8.57 to the dollar on emerging market contagion in the wake of the eurozone debt crisis.
The local currency made a slight recovery in early trade after losing 2.5 percent against the dollar on Wednesday when it reached a six-month low of 8.53 on concerns over the eurozone debt crisis.
At 16:21 it was bid at R8.5698 the dollar from Wednesdays close of 8.5376. It was bid at R10.6073 to the euro from Wednesdays close of R10.5564 and at R13.2338 against sterling from R13.2046 at Wednesdays close. The euro was bid at US$1.2389 from Wednesdays close of $1.2368.
The PPI numbers released earlier had little impact on the currency. SAs April producer inflation reading came in at a lower than expected 6.6 percent from 7.2 percent in March Statistics SA data showed.
PPI was up 0.3 percent on the month while export inflation rose 5.3 percent on the year but went down 0.2 percent on the month.
Later in the afternoon trade statistics were released SA recorded a trade deficit of R9.9 billion for its trade with non-Southern African Customs Union trading partners in April after a R5.5 billion deficit in March according to customs and excise figures.
Forecasts among seven economists ranged from a R7.5 billion deficit to a R2 billion deficit.
There was a decrease in exports of R9.2 billion (14.9 percent) to R52.2 billion and a decrease in imports of R4.8 billion (7.2 percent) to R62 billion.
The local data didnt move the markets not much really happened today. The danger is we might reach 8.62 on the back of a weaker euro a local trader said.
Meanwhile Dow Jones Newswires reported the European Central Bank's baseline scenario for the eurozone economy is still for a modest recovery
Bonds recover on rate cut hopes
The short end of the South African bond curve recovered in afternoon trade on Thursday as worse than expected April foreign trade data prompted speculation that the repo rate would be cut to counter the decline in exports.
Bonds have staged a surprising recovery this afternoon given that the rand is still weak a local trader said.
At 16:15 the benchmark R157 bond was trading at 6.375 percent from 6.420 percent in midday trade and Wednesdays close of 6.400 percent. The R207 was trading at 7.650 percent from a previous close of 7.635 percent and the R186 was trading at 8.375 percent from its close of 8.360 percent.