South African rand slumps on local PMI data, stronger dollar

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South African rand slumps on local PMI data, stronger dollar

7:59 CAT | 02 Oct 2023

File photo: Reuters

The South African rand slumped on Monday, dragged down by local purchasing managers’ data that showed factory activity shrank for the eighth month in a row in September.

At 1325 GMT, the rand traded at 19.1475 against the dollar, 1.1% weaker than its previous close.

The dollar was last up around 0.37% against a basket of global currencies.

The Absa Purchasing Managers’ Index (PMI) showed that local manufacturing activity contracted due to depressed demand and constrained production.

“The drop in the PMI today (weakened) the rand, pulling it back to R19.00/USD on disappointment of a much weaker than expected figure, although the rand’s reaction could prove temporary,” Investec economist Annabel Bishop said in a research note.

Monday’s fall reversed gains made by the rand on Friday after U.S. Treasury yields lost some steam and risk appetite returned to the market.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index last traded around 0.6% weaker than its previous close.

South Africa’s benchmark 2030 government bond was weaker, with the yield up 7 basis points to 10.880%.

Source: Reuters