Johannesburg—The South African rand strengthened in early trading on Thursday as investors positioned ahead of key domestic economic data, while also watching U.S. inflation figures that could influence expectations for the Federal Reserve’s interest-rate path.
At 0557 GMT, the rand was trading around 16.0250 per dollar, about 0.2% stronger than its previous close.
Statistics South Africa is due to release July mining and manufacturing production data later on Thursday. Reuters-polled analysts expect mining output to have declined 2.8% and manufacturing production to have fallen 1.6%.
Nedbank economists said weakness in both sectors was likely to persist, citing elevated input costs, structural constraints and higher fuel prices linked to the U.S.-Iran conflict.
The South African Reserve Bank is also scheduled to release second-quarter current-account data at 0900 GMT. Analysts expect a deficit of about 0.4%.
Global Market
The dollar was broadly flat against a basket of currencies as markets awaited U.S. producer price data due later on Thursday and consumer inflation figures scheduled for Friday.
A Reuters poll showed that a majority of economists expect the U.S. Federal Reserve to keep interest rates unchanged at its Sept. 15–16 meeting and through the remainder of the year, despite market expectations for a series of rate hikes.
The rand, like other risk-sensitive currencies, remains vulnerable to shifts in global investor sentiment and U.S. monetary policy, alongside domestic economic developments.
South Africa Bonds
South Africa’s benchmark 2035 government bond weakened in early trading, with its yield rising 5.5 basis points to 8.675%.
Source:Reuters
Reporting by: Sfundo Parakozov
Editing by: Jamie Freed
