* Rand shrugs off domestic woes
* Focus on Fed's policy decision
* Stocks fall, led by MTN
(Updates levels, add quotes)
JOHANNESBURG, June 14 South Africa's rand gained
on Wednesday as the dollar fell after the United States reported
weaker-than-expected inflation and retail sales data. Stocks
ended lower as mobile phone operator MTN slid to a
At 1530 GMT, the rand traded 1.25 percent higher at
12.6000 per dollar, after closing at 12.7600 overnight in New
York, bringing weekly gains to around 2.5 percent.
The unexpected decline in monthly U.S. consumer prices and
retail sales suggested inflation pressures are moderating, which
may delay interest rate increases by the Federal Reserve.
The prospect of slower-than-expected U.S. rate increases
boosts demand for emerging-market assets, which offer higher
returns but carry more risk.
The Fed is scheduled to announce its latest rate decision at
2 p.m. eastern time (1800 GMT) on Wednesday.
The rand held on to gains despite continued fallout
triggered by credit ratings downgrades.
A survey showed on Wednesday that South African business
confidence fell deeper into negative territory in the second
quarter, to a level not seen since the 2009 recession, as
business activity remained week and political risk persisted
"This sets the economy up for another year of negative
growth in gross domestic fixed investment, which will serve as
another blow to policymakers' hope to boost the country’s
falling potential growth rate," said Jeffrey Schultz, an
economist at BNP Paribas Securities South Africa.
Government bonds also gained, with the yield for the
benchmark instrument due in 2026 dropping 3.5 basis
points to 8.405 percent.
On the stock market, the benchmark Top-40 index was
down 0.4 percent at 45,085 points. The broader All-share index
was down 0.3 percent at 51,489 points.
Shares in MTNw were down 2 percent to 111.60 rand, their
lowest in four months. MTN counts crude-oil producers Nigeria
and Iran among its three largest markets, and oil price fell
after reports showed global supply was growing.
Diversified mining companies Anglo American and BHP
Billiton were the biggest losers among the blue chips,
as copper prices fell before the Fed's decision.
Anglo shares were down 2.9 percent to 171.71 rand and BHP
slid 2.2 percent to 191.04 rand.
Gold mining companies were among the gainers as the bullion
price rose 1 percent after the U.S. inflation data.
The JSE's gold index was up 1 percent at 1,337.40
(Reporting by Olivia Kumwenda-Mtambo and TJ Strydom, editing by