Rand eases as dollar regains footing

The rand eased early on Friday as the dollar, which has been a safe haven amid global uncertainty over trade, touched 112.77 against the yen , its highest level in six months, boosted by expectations of higher US inflation.

At 0750 GMT the rand was 0.32% softer at 13.34 per dollar, after rallying more than 2% in the previous session, a chunk of those gains seen late in local trading after manufacturing figures for May came in better-than-expected.

May manufacturing output expanded 2.3% year-on-year in May and was up 1.5% on a monthly basis. On a quarterly basis however output shrunk, raising fears about second quarter economic growth after a first quarter contraction.

Technical plays could provide support after the rand hurdled resistance at 13.50 and 13.30 to lure back investors with long dollar positions.

News late on Thursday that Saudi Crown Prince Mohammed bin Salman pledged to invest $10 billion in building refineries, petrochemicals and renewable energy, during an official visit by President Cyril Ramaphosa, also boosted sentiment.

Bonds were slightly firmer with the yield on the benchmark bond due in 2026 down two basis points at 8.705%.

The Johannesburg Stock Exchange’s Top 40 Index was 0.1% lower at 50 620.