Johannesburg — The South African rand weakened on Thursday, pressured by a stronger U.S. dollar, even as fresh domestic data pointed to improving manufacturing sentiment and resilient vehicle sales.
The rand traded at 16.5750 per dollar at 1355 GMT, down about 0.8% from its previous close, while the U.S. dollar index rose 0.2%.
South Africa’s manufacturing sector showed signs of recovery in September. The latest purchasing managers’ index (PMI) survey indicated that manufacturing sentiment improved after three consecutive months of contraction, supported by a rebound in new orders.
At the same time, the country’s automotive market continued to show resilience. Data from the National Association of Automobile Manufacturers of South Africa (NAAMSA) showed that new vehicle sales rose 12.7% year-on-year in September, accelerating from an 11.4% increase in August.
NAAMSA said the domestic vehicle market has remained resilient despite higher borrowing costs, persistent inflationary pressures and subdued economic growth.
Source:Reuters
Reporting: Sfundo Parakozov &Nilutpal Timsina
Editing: David Goodman &Jonathan Ananda
Why it matters
The contrasting signals highlight the mixed picture facing South Africa’s economy. Improving manufacturing activity and strong vehicle sales suggest pockets of resilience in domestic demand, while the rand’s decline shows that currency markets remain sensitive to movements in the U.S. dollar and broader financial conditions.
South African financial markets also weakened. The Top-40 index fell 0.3%, while the yield on the benchmark 2035 government bond increased 2.5 basis points to 8.845%, indicating lower bond prices.
