JOHANNESBURG (Reuters) -The South African rand strengthened against a weaker dollar on Monday, shrugging off a further decline in local manufacturing sentiment and upbeat vehicle sales figures.
At 1406 GMT, the rand traded at 17.8850 against the dollar, about 0.6% firmer than Friday’s closing level.
The seasonally-adjusted Purchasing Managers’ Index sponsored by South African bank Absa declined for the seventh straight month, with survey respondents citing persistent logistical issues that have held back demand.
Separately, data from the national auto association NAAMSA showed a 22% year-on-year increase in new vehicles sold domestically in May.
Nedbank economists had expected a strong rise last month, reflecting last year’s low base and easing financial conditions after interest rate cuts by the South African Reserve Bank (SARB), including last week.
“The SARB’s May decision will add further momentum to these gains, as consumers respond positively to improved credit conditions,” NAAMSA said.
The dollar last traded about 0.7% weaker against a basket of currencies as U.S.-China trade tensions continued to simmer and investors turned defensive ahead of U.S.
jobs data.
On the Johannesburg Stock Exchange, the Top-40 index last traded up 0.8%.
South Africa’s benchmark 2035 government bond was weaker, with the yield up 8 basis points at 10.235%.
(Reporting by Sfundo Parakozov and Alessandro Parodi.
Editing by Kirsten Donovan and Mark Potter)
