JOHANNESBURG (Reuters) -South Africa’s rand strengthened on Monday as the U.S. dollar weakened, ahead of a slew of local economic data in the coming days that could give clues on the health of the economy.
At 1536 GMT, the rand traded at 15.4850 against the dollar, 0.74% firmer than its previous close.
“The rand gains as markets settle on the Fed’s minutes indicating a steady rate hike cycle and little chance of recession,” Investec economist Annabel Bishop said in a research note, referring to the U.S.
Federal Reserve.
Bishop also highlighted growing optimism for a Chinese economic recovery in the third quarter of the year due to the slowing down of the COVID-19 outbreak.
The dollar resumed its slide on Monday as risk appetite across markets tentatively strengthened, supported by encouraging economic data and bets that the Fed will tighten policy at a slower pace.
Local focus in the week will be on a number of economic indicators, including April credit and money supply data, unemployment numbers for the first quarter of 2022 and April trade balance numbers – all due on Tuesday.
In the equities market, stocks rose alongside global equity markets, boosted by hopes that China’s Beijing and Shanghai hubs are reopening from virus restrictions and a package of stimulus measures released by the Shanghai local government.
China is South Africa’s largest trading partner.
The Johannesburg All-Share index climbed 2.09% to 71,958 points while the Top-40 index closed 2.27% higher at 65,335 points.
Among the gainers was shipping company Grindrod, up 7.24% to 8.30 rand, after it announced late last week that it had sold Grindrod Bank to African Bank.
The government’s benchmark 2030 bond was stronger, with the yield down 5.5 basis points to 9.665%.
(Reporting by Olivia Kumwenda-Mtambo, Anait Miridzhanian and Nqobile Dludla; Editing by Toby Chopra and David Holmes)
