JOHANNESBURG (Reuters) – The South African rand was stronger on Monday at the start of a week filled with closely watched global and domestic economic data releases.
At 1517 GMT, the rand traded at 18.20 against the dollar, about 0.7% firmer than its previous closing level.
The U.S. dollar was down about 0.1% against a basket of global currencies.
“Currency markets have continued to drift sideways in anticipation of the data-filled week,” said Wichard Cilliers, head of market risk at TreasuryONE.
“Emerging market currencies have firmed further after last week’s sell-off, with the rand trading back at the R18.20 handle,” Cilliers added.
The rand is likely to take its direction this week from global data prints including U.S. consumer inflation data on Wednesday, and South African mining, unemployment and retail sales figures over Tuesday and Wednesday.
The U.S. inflation reading will be scrutinised for clues on the Federal Reserve’s monetary policy path, while the local data releases will show whether Africa’s most industrialised economy gained any momentum in the middle of the year.
Oxford Economics Africa said the domestic data releases were not expected to show much improvement, with the unemployment rate seen stuck around 32%, the mining sector dealing with supply-side constraints and subdued consumer demand continuing to pressure retail.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed about 0.1% down. South Africa’s benchmark 2030 government bond was stronger, with the yield down 3 basis points at 9.36%.
(Reporting by Alexander Winning and Tannur Anders; Editing by Shounak Dasgupta and Susan Fenton)
