Rand on steady footing

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NewRandMoney

Reuters.

Johannesburg - The South African rand continued last week's firm run on Monday, remaining in the 10.60 band against the dollar as positive factory data from China shored up gains achieved by the unit in the previous week.

The rand added to strides that saw it reach 10-day highs against the dollar last week, trading 0.14 percent stronger from its New York close and reaching 10.6460 rand per dollar by 09:00 SA time.

Manufacturing data from China released earlier in the session showed that factory production in the world's second-largest economy had expanded for the first time in 6 months to 50.8.

The better-than-expected numbers from a key market for South African exports restored belief that China would reach its economic growth target of 7.5 percent year-on-year, good news for a local economy beset by fears of a recession after it contracted in the first quarter.

Signs that a conclusion to a crippling 22-week work-stoppage in the platinum sector may be imminent could also buoy the local currency.

“At the moment we are seeing strength based on the Chinese figures. Commodity prices are doing well so the rand strength has a lot to do with what is happening globally,” said Jim Bryson, a forex trader at Rand Merchant Bank.

“The possible end to the strike is a positive but you know NUMSA is next,” he added, referring to possible industrial action by the NUMSA metalworkers union.

Government bonds strengthened marginally, with the yield on paper due in 2026 edging down 1.5 basis points to 8.33 percent.

That on the shorter-dated paper due next year eased by the same margin to 6.655 percent. - Reuters


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