The South African rand weakened against a strengthening U.S. dollar on Monday, with upcoming U.S. economic data expected to influence currency moves throughout the week.
By 1533 GMT, the rand was trading at 17.8925 to the dollar, marking a 0.34% decline from its previous close. The dollar, meanwhile, rose by approximately 0.37% against a basket of major global currencies, as investors looked to Wednesday’s U.S. inflation report for potential indicators of a Federal Reserve rate cut anticipated next week. U.S. producer inflation data is also set for release this week, which could further impact market movements.
“Direction in currency markets will likely be taken from U.S. data releases,” ETM Analytics said in a research note, adding that a more significant rate cut from the Fed could enhance the risk-sensitive rand’s outlook.
In South Africa, key local data expected this week includes July manufacturing output figures due on Tuesday, and mining production numbers scheduled for Thursday. Economists polled by Reuters forecast year-on-year growth in both sectors, following declines in June, highlighting the volatile nature of Africa’s most industrialized economy.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed slightly higher, gaining 0.07%. However, South Africa’s benchmark 2030 government bond weakened, with the yield rising by 3 basis points to 9.02%.
