South Africa's rand recovers vs dollar, power crisis in focus

South African bank notes featuring an image of former South African President Nelson Mandela are displayed at an office in Johannesburg January 17, 2013. REUTERS/Siphiwe Sibeko·Reuters· (Reuters)
Reuters

JOHANNESBURG (Reuters) - South Africa's rand recovered against the dollar early on Thursday as the greenback fell on weak U.S. economic data but widespread power cuts could put pressure on the local unit. At 0646 GMT the rand was trading 0.48 percent firmer at 12.0075 to the dollar compared with its closing level on Wednesday. The currency slipped over 1 percent on Wednesday towards its softest level in two weeks. "Markets are still trying to get a handle on all the events of yesterday, which suggests scope for continued choppy trade today," RMB analyst John Cairns said in a market note. Power utility Eskom restarted rolling blackouts on Thursday, the fifth straight day of power cuts imposed to prevent the grid from collapsing in Africa's most advanced economy. Globally, Wednesday's weak Chinese data further boosted expectations of monetary stimulus from Beijing while soft U.S. data dampened prospects of an early rate hike by the Federal Reserve. The European Central Bank also affirmed its loose policy stance on Wednesday. In fixed income, the yield for the 2026 benchmark was down 3 basis points to 7.765 percent.