On Monday, the South African rand strengthened against a declining dollar as certain emerging market currencies benefited from positive economic data from China.
The rand was trading at 18.8775 versus the dollar at 1542 GMT, up 1.35% from the previous close.
The last time the dollar traded versus a basket of world currencies, it was down around 0.27%.
Risky currencies like the rand were supported by strong lending figures and new stimulus measures from China, South Africa’s largest trade partner.
Locally, it didn’t seem like South Africa’s manufacturing production data, which was up 2.3% year over year in July after increasing by a revised 5.9% in June, had much of an impact on the currency. ZAMFG = ECI, (ZAMAN = ECI)
Investors will this week shift their attention to U.S. inflation data expected on Wednesday in the absence of significant local economic data points.
According to RMB analysts ‘ research note, midweek risks are at an all-time high with the U.S. CPI on Wednesday and the ECB rate decision and press conference on Thursday.
Before the Federal Reserve meets next week, inflation statistics from the U.S. may provide hints about the direction of interest rates and impact the risk-sensitive rand.
On the Johannesburg Stock Exchange, shares increased. The blue-chip Top-40 index (.JTOPI) ended the day up 0.73%.
The yield on South Africa’s standard 2030 government bond increased by 1.5 basis points to 10.390%, showing a little deterioration.
