JOHANNESBURG: South Africa's rand recovered the previous day's losses against the dollar on Wednesday as manufacturing output beat forecasts and the keen reception of this week's dollar bond underpinned the market.
The rand climbed to a session high of 9.8925 per dollar, its strongest since Aug. 15. It was up 0.77 percent at 9.9030 by 1551 GMT compared with its close in New York on Tuesday.
Manufacturing output was up 5.4 percent year-on-year in July, official data showed, far outpacing market expectations of 1.5 percent and cushioning the rand from further pressure after Tuesday's weak current account numbers.
"We are trading largely range-bound and in line with other emerging market peers. Most emerging market currencies are trading stronger than the dollar today and the rand is not a stand out amongst that basket," said Rob Price, a market analyst with ETM.
Investors were treading fairly cautiously ahead of US jobs and retail data later in the week and the Federal Reserve's policy meeting next week, which should offer clarity on when it will start reducing its bond-buying programme that had boosted emerging markets.
Government bond prices were up on the day as the market savoured the $2 billion auction of a 12-year bond which was nearly four times subscribed.
The yield on the benchmark 2026 bond fell 9 basis points to 8.235 percent while the 2015 bond was down 8.5 basis points at 6.105 percent.
"Guys are a little bit uncertain that the Fed will begin slowing its bond purchases at its meeting next week and that has been pretty supportive of Treasuries. There has been more buying interest on EM bonds," said ETM's Price.
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