JOHANNESBURG: South Africa's rand strengthened against the dollar on Tuesday after manufacturing unexpectedly grew in March, while bond yields continued to climb affected by the Greek debt crisis.
At 1550 GMT the local unit inched 0.24 percent firmer to 12.0750 per dollar, having traded weaker for most of the session around a two-week low of 12.1490.
Data from Statistics SA showed manufacturing production expanded by a more than expected 3.8 percent year-on-year in March, helping to offset rating's firm Moody's grim warning about a possible downgrade.
"The March figure is unlikely to signal a sharp turnaround," analysts from research firm Capital Economics said in a note, referring to manufacturing which has been on a steady slump.
Moody's said South Africa's credit rating, currently two notches off "junk" status, would be in jeopardy if commitments to fiscal consolidation and stabilising debt did not materialise.
Public servants are voting this week on whether to accept a final wage hike from government or embark on mass strike action, while power supplier Eskom has been cutting electricity supply from the national grid almost on a daily basis as it battles the worst power shortages since 2008.
Yields on government paper rose steeply as the Greek debt crisis continued to weigh on global fixed income appetite.
The heavily indebted European nation managed a last-gasp 750 million euros ($839 million) payment to the International Monetary Fund on Tuesday but jitters in the global bond market remained.
South Africa's benchmark 2026 instrument leapt to a 7-month high before pulling back slightly, adding 7 basis points to 8.16 percent.
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