Johannesburg - The rand had a muted reaction to the release of improved activity in the local manufacturing sector as mixed factory output data from elsewhere weighed on the local currency.
“Although we had a good PMI number‚ it didn’t have much effect on the rand given the mixed data that we’ve seen from the rest of the world‚” said Warrick Butler‚ head of spot rand and emerging market trading at Standard Bank.
The Kagiso purchasing managers index (PMI) showed the local PMI had added 1.2 points in June‚ regaining all of May’s losses to reach 52.2 points. Factory output in the eurozone also improved to a 16-month high at 48.8 points‚ although still in contraction. But data from China disappointed with its PMI falling to 50.1 in June from 50.8 in May‚ further signalling that its economy may be losing steam.
At 11:24 the rand was bid at R9.9177/$ from Friday’s close of R9.8884.
The local currency was bid at R12.9478/€ from its previous close of R12.8699 and was at R15.1193 against sterling from R15.0516 at its previous close.
The euro was bid at $1.3050 from $1.3013 at Friday’s close.
The market will be closely watching the release of the US ISM manufacturing survey expected at 16:00.
“If US manufacturing data is better than the expected 50.5‚ we could see US treasury yields being sold off again‚ posing a risk to emerging market currencies‚” Butler said.
Since the beginning of the year the rand has depreciated by 16% against the dollar‚ with other emerging markets currencies like Brazil’s real falling 6.8% against the greenback and the Turkish lira falling 8.2%.