JOHANNESBURG: South Africa's rand was slightly weaker against the dollar on Monday despite data showing stronger manufacturing performance and a modest rise in vehicle sales in June.
The rand was at 9.9100 to the dollar at 1553 GMT, down 0.3 percent from its close in New York on Friday.
South Africa's Purchasing Managers' Index rose in June, staying above the 50 point mark for the third straight month, partly on signs of a recovery in the US economy.
Data from the National Association of Automobile Manufacturers showed South Africa's new vehicles sales rose 3.3 percent in June compared with the same month last year.
The rand remains vulnerable to US non-farm payrolls data on Friday, which could bring the Fed closer to unwinding the bond-buying programme that has encouraged investors to seek higher yields in countries like South Africa.
In the medium term, the dollar's rise and slowing demand in China are also likely to put pressure on commodity currencies such as the rand, as are persistent tensions in the mining sector, analysts said.
"We've got this perfect storm facing the rand globally as well as domestically," Absa Capital forex strategist Mike Keenan said at a briefing on Monday.
The bank expects the rand to move to 10.50 to the dollar within the next three months, before going back to 10.
"There's scope for a bit more weakness but by the end of the year we think that a lot of this bad news will be priced in," Keenan said.
The yield on the 2026 government bond was flat at 7.895 percent, while that on the 2015 paper was down three basis points at 6.095 percent.
Comments
Comments are closed.