In early trade on Monday, the South African rand weakened against a stronger U.S. dollar, trading at 17.8850 per dollar, marking a 0.3% decline from its previous close. The dollar’s strength, up around 0.2% against a basket of global currencies, has been attributed to anticipation of the upcoming U.S. inflation report, which could offer insights into the Federal Reserve’s expected rate cut next week.
ETM Analytics noted that the direction of currency markets this week is likely to be influenced by U.S. economic data releases. A larger-than-expected Fed rate cut could potentially improve the prospects for the risk-sensitive rand.
Local data releases this week include July’s manufacturing output figures, scheduled for Tuesday, and mining production numbers set for Thursday. Economists forecast year-on-year growth in both sectors after June’s declines, highlighting the volatile conditions in South Africa’s industrial sectors.
In the bond market, South Africa’s benchmark 2030 government bond remained unchanged in early trade, with the yield steady at 8.99%.
