Johannesburg - The rand fell against the dollar early on
Thursday, weighed by a poor Chinese manufacturing survey that raised fears of a
slowdown in South Africa’s biggest single export nation.
HSBC’s Flash PMI for China plunged to a nine-month low,
signalling an extended slowdown in the world’s largest metals consumer and
hitting resource-heavy currencies such as the rand.
Risky assets had earlier been cheered by the US Federal
Reserve suggesting it could deliver more stimulus to the world’s biggest
economy. The rand may trade in a range in the session, and not make an attempt
at R8.20 resistance as market players try to balance the messages from the
global economic powers.
The rand fell 0.4% to R8.2540 to the dollar at 06:44 GMT,
compared with a close of R8.22 in New York on Wednesday.
“This morning we have been party to witness the demise of
the Chinese PMI data. It’s not great for risky assets, who found great favour
just after the release of the (Fed) minutes literally 6 hours ago,” said
Warrick Butler, a rand trader at Standard Bank.
However the rand was off much weaker levels above R8.30 hit in the previous session in a sign the currency may trade in a range over the next sessions.
“Overall the rand seems destined to be captivated by the
wider R8.05-R8.55 range and we really need to see the end of August before
things pick up again,” Butler added.
The northern hemisphere is in summer holidays, bringing a
lull to local markets.
Yields on government bonds rallied for a fourth day,
supported by strong demand at Tuesday’s auction and lower-than-expected
inflation data on Wednesday.
The 2015 paper was at 5.46% while the 2026 issue firmed
slightly less at 7.465%, weighed by expected extra issuance later in the
session.
The Treasury may switch R2.5bn of 2014 bonds into the 2026 issue. Results are due after 09:30 GMT.
* Follow Fin24 on Facebook, Twitter and Google+.