Johannesburg - The rand strengthened against the dollar before data showing producer-price inflation in South African probably eased last month and sales of new homes in the US may have risen.
The rate of producer inflation in Africa’s largest economy slowed to 6.5 percent from 6.6 percent in July, a report by the country’s statistical agency will show tomorrow, according to the median estimate of seven economists surveyed by Bloomberg.
New-home sales in the US rose to 420,000 units in August from 394,000 a month earlier a report will show at 4 p.m. Johannesburg time, according to 77 economists.
The rand “has basically traded in a 9.82 to 9.88 range since Monday morning in very lacklustre trade” as “we await local PPI numbers,” Mohammed Nalla, head of strategic research at Nedbank Group Ltd. in Johannesburg, said in an e-mailed note to clients today.
The currency advanced 0.2 percent to 9.8523 per dollar by 10:40 a.m. in Johannesburg, bringing its increase this month to 4.3 percent.
The rand weakened 14 percent this year, the worst performer among 16 major currencies tracked by Bloomberg.
Yields on rand-denominated government bonds due December 2026 fell six basis points, or 0.06 percentage point, to 7.85 percent, the lowest in more than two months on a closing basis.
Losing Faith
While sales of new houses in the US may be on the rise, a Bloomberg National Poll showed Americans are losing faith in the nation’s economy recovery.
Initial jobless claims increased to 325,000 in the week to September 21 from 309,000 in the prior period, data tomorrow may show, according to 45 analysts surveyed by Bloomberg.
Federal Reserve Chairman Ben S. Bernanke said the bank wants to see more signs of a US economy recovery before beginning to taper the $85 billion a month monetary stimulus that’s sparked demand by investors for emerging-market assets.
South Africa has the world’s largest-known reserves of platinum, used in the automotive-manufacturing industry, and chrome and is the sixth-largest gold miner.
The spot price of gold retreated 0.1 percent to $1,321.67 per ounce while platinum rose a second day, gaining 0.1 percent to $1,429.20 per ounce. - Bloomberg News