South African rand inches lower before manufacturing PMI, vehicle sales figures

JOHANNESBURG: The South African rand weakened slightly in early trade on Monday ahead of the release of a ​local manufacturing purchasing managers’ index and vehicle sales data ‌for May.

At 0656 GMT the rand traded at 16.2450 against the dollar , roughly down 0.2% from its previous close.

An Absa PMI survey is ​set to be released at 0900 GMT and ​will shed light on manufacturing conditions in Africa’s most ⁠industrialised economy.

Manufacturing sentiment improved in April, helped by a rebound in ​output and new sales orders.

Investors will then turn their focus ​to vehicle sales data due around 1200 GMT, which will give a snapshot of consumer demand for big-ticket items.

Car sales rose 13% in ​April. Nedbank economists in a research note forecast an 8.7% ​increase in May.

“Despite mounting risks associated with fuel prices, their impact on ‌headline ⁠inflation and the knock-on effect on interest rates, vehicle sales are expected to remain buoyant, supported by earlier interest rate cuts and an influx of affordable imported models,” they said.

Oil ​prices rose more than ​2% on ⁠Monday after Iran and the US traded strikes and Israel ordered troops to move further into ​Lebanon in the battle with the Tehran-backed Hezbollah ​group.

“For now, the rand continues to use oil prices as its compass and will look to the Middle East for further ⁠guidance ​on direction,” said ETM Analytics.South Africa’s benchmark ​2035 government bond weakened in early deals, with the yield rising 6.5 ​basis points to 8.45%.