Rand firms on retail sales numbers that were better than expected

The rand was firmer late on Wednesday after local December retail trade sales figures came in better than expected‚ lifting market sentiment.

Riskier assets‚ such as the rand‚ were also boosted by improved risk appetite in global markets.

Domestic December retail trade sales increased 4.1% compared with a year ago. They rose 3.8% in November‚ Statistics SA data showed on Wednesday.

The 4.1% was the quickest pace of acceleration since January 2014‚ when sales rose 4.9% year on year.

At 3.29pm‚ the rand was at R15.6568 against the dollar from R15.7941 previously. It weakened to R15.87 to the dollar after the inflation data was released earlier in the morning.

Against the euro‚ the rand was at R17.4258 from R17.6015 and was at R22.3897 against the pound from R22.5946 previously.

The euro was at $1.1130 from $1.1145 previously.

First National Bank (FNB) senior industry economist Jason Muscat said the increase in December 2015 retail trade sales underscored the “relative resilience” of the South African consumer.

Shoppers seemingly kept tills ringing at clothing and furniture retailers‚ which expanded 6.5% and 7.7% year on year respectively‚ he said.

FNB was‚ however‚ less optimistic about the year ahead‚ as the bank anticipated a tightening of lending criteria‚ little to no job creation‚ rising inflation and‚ consequently‚ interest-rate increases.

Inflation‚ as measured by the consumer price index (CPI)‚ accelerated to 6.2% from 5.2% in December — worse than market expectations of 5.9%.

- TMG Digital/BDlive