South African rand inches lower before manufacturing PMI, vehicle sales figures
- The rand traded at 16.2450 against the dollar , roughly down 0.2% from its previous close
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%.