JOHANNESBURG (Reuters) – South Africa’s rand strengthened on Monday after soft U.S. data and ahead of a data-packed week, as investors shrugged off the return of rolling blackouts to Africa’s most industrialised economy.
At 1502 GMT, the rand traded at 18.38 against the U.S. dollar, about 0.4% firmer than its closing level on Friday. The dollar traded about 0.1% stronger against a basket of currencies.
“The rand has continued its recent appreciation against the dollar largely due to U.S. specific factors including soft economic data and tariff uncertainty,” said Warren Venketas, trading services manager at IG Group.
“The possibility of a peace treaty between Russia and Ukraine may well extend rand strength as geopolitical tensions subside,” Venketas added.
Domestic investors will focus on South Africa’s monthly consumer inflation reading on Wednesday, producer inflation figures on Thursday and trade and budget balance data on Friday.
Markets will also look to second quarter gross domestic product estimates out of the U.S. on Thursday and the Federal Reserve’s preferred measure of inflation reading on Friday for clues on the health of the world’s biggest economy.
Annabel Bishop, an Investec economist, said the rand had shrugged off the latest bout of power cuts at the weekend, with investors now used to South Africa’s blackouts.
On the stock market, the Top-40 index closed down about 1.8%.
South Africa’s benchmark 2030 government bond was stronger, with the yield down 5.5 basis point to 9.115%.
(Reporting by Sfundo Parakozov and Tannur Anders; Editing by Bhargav Acharya, Kirsten Donovan and Christina Fincher)
