Cape Town - The rand gained for a second day against the dollar as Chinese manufacturing expanded and prospects of an imminent military strike against Syria faded, boosting investor appetite for riskier assets.
A manufacturing gauge in China, the biggest buyer of South African raw materials, rose to a 16-month high in August. South Africa’s purchasing managers’ index declined last month after hitting a year-high in July, a report may show today.
In the US, where markets are closed today, President Barack Obama delayed action against Syria by seeking approval from Congress.
The rand “should start the week positively, helped by Chinese data and an easing of stress over Syria,” John Cairns, a currency strategist at Rand Merchant Bank in Johannesburg, said in e-mailed comments.
“Once again the data indicates Chinese resilience and reduces the risks of a hard landing” that would damp South Africa’s export prospects, he said.
The rand advanced 0.8 percent to 10.1998 per dollar as of 10:08 a.m. in Johannesburg.
Yields on benchmark 10.5 percent bonds due December 2026 dropped three basis points, or 0.03 percentage point, to 8.43 percent.
China’s Purchasing Managers’ Index was at 51.0, an official report showed yesterday.
The median estimate in a Bloomberg survey was 50.6.
A separate PMI released today by HSBC Holdings Plc and Markit Economics rose to 50.1 last month from 47.7 in July, the biggest gain in three years and the first reading above 50 since April.
China buys about 14 percent of South African exports, according to government data.
South Africa’s PMI probably declined to 51.5 in August, from 52.2 in July, a report may show at 11 a.m. in Johannesburg, according to the median estimate of four economists in a Bloomberg survey. - Bloomberg News