Rand awaits manufacturing data

Johannesburg - The rand was a touch softer in the afternoon session on Monday, with the local currency awaiting data from the US Institute for Supply Management (ISM) on manufacturing for further direction.

At 15:54 the rand was bid at 7.8807 to the dollar from 8.1160 at its previous close. It was bid at 11.6350 to the euro from its previous close of 11.9713 and was at 12.8726 against sterling from 13.2901.

The euro was bid at $1.4764 from $1.4734 overnight.

A local trader said: "We did see support at a technical level of 7.92-93 against the dollar, but having tried a few times and failed, the rand pulled back a fraction.

"We are waiting for US ISM figures on manufacturing, and will track dollar movement for further direction, following the Japan mess last night, which is now out the way."

Dow Jones Newswires reported that the euro and other higher-yielding currencies strengthened against the dollar in morning trading on Monday, as improving global economic data countered some of the caution that prevailed in last week's markets.

But currency investors were looking toward the 10:00 EST release of US manufacturing PMI data to determine whether the small morning rally of risk- positive currencies would last throughout the New York session.

"The ability of risk-sensitive assets to sustain their early on Monday rally is contingent on important data flow in the US," said Credit Suisse analysts.

If US manufacturing data come in at or ahead of expectations, the euro and other higher-yielding currencies could extend their rallies against the dollar. Economists expect the index showing manufacturing activity to have expanded to 53.3 in October from 52.6 in September.

Friday's release of monthly US non-farm payrolls numbers, which are expected to improve, also could help the euro and other higher-yielding assets; if the jobs numbers disappoint, another wave of risk aversion could wash over markets, benefiting the dollar.

- I-Net Bridge