Market News

South African rand takes breather after recovery rally - REUTERS

JANUARY 13, 2021

JOHANNESBURG, Jan 13 (Reuters) - The South African rand was trading flat early Wednesday, taking a breather after a recovery rally in the previous session when the U.S. dollar weakened.

At 0715 GMT, the rand ZAR=D3 traded at 15.2350 versus the U.S. currency, 0.1% weaker than its previous close.

With no major local data releases left this week, the rand is expected to take its cue from global drivers.

Data on Tuesday showed South African manufacturing output ZAMAN=ECI fell 3.5% on-year in November, more than expected, with large production declines by fuel, chemicals and furniture firms among others.

However, there was little impact on the rand as the figures merely confirmed longstanding worries about the health of the sector.

Despite gains of around 2% on Tuesday, the rand is still down more than 3% against the greenback this year as a new peak in daily COVID-19 cases and bleak economic outlook has put a damper on sentiment.

Government bonds edged higher early on Wednesday, as the yield on the benchmark 2030 instrument ZAR2030= dropped 3.5 basis points to 8.765%.

(Reporting by Alexander Winning)


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