Rand strengthens ahead of local PMI, car sales

The rand edged higher in early trade on Monday ahead of a local purchasing managers’ index (PMI) survey and new vehicles sales figures.

At 0647 GMT, the rand traded at R18.89 against the dollar, nearly 0.3% stronger than its previous close.

The dollar last traded around 0.07% weaker against a basket of global currencies.

However, despite rand’s recent gains, analysts warned the currency was set to take its cues from global economic drivers such as US labour data in the week ahead.

“(The rand) traded very well at the end of last week… But the pressure is back on this morning,” wrote Rand Merchant Bank analysts in a research note.

The rand made gains on Friday after US Treasury yields lost some steam and risk appetite re-entered the market.

Local investors will be eyeing the Absa PMI survey on domestic manufacturing sector activity due around 0900 GMT and September new vehicle sales data around 1200 GMT.

South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 0.5 basis points to 10.815%.