JOHANNESBURG (Reuters) -South Africa’s rand held on to early gains on Thursday after better-than-expected manufacturing data, while investors kept a close tab on trade negotiations in =the wake of U.S. President Donald Trump’s latest tariff threats.
At 1505 GMT, the rand traded at 17.74 against the dollar, up roughly 0.6% from Wednesday’s close. It kept at that level through much of the day’s session.
South Africa’s manufacturing output rose 0.5% year on year in May, after falling by a revised 6.4% in April, statistics agency data showed on Thursday at 1100 GMT.
Analysts polled by Reuters and Nedbank economists expected production to have fallen 1.5% and 0.5% respectively.
“While the monthly data may show some improvement, underlying conditions remain weak” Nedbank economists said in a note.
The note also referenced a purchasing managers’ index released last week that showed tentative improvement in manufacturing sentiment, though output is still weak and logistics bottlenecks remain.
“The sector continues to grapple with excess capacity amid subdued global and domestic demand and weak commodity prices,” the note said.
The Johannesburg Stock Exchange’s Top-40 index was up 0.1%, helped by stronger commodity prices which boosted mining companies listed on the local bourse.
Precious metal prices clawed back some of their losses after falling on Wednesday following Trump’s threat to impose a 50% tariff on copper imports.
“South Africa is a major commodity-exporting country, and copper is one of its important minerals. When copper prices rise, it does contribute towards rand strength, and when copper prices fall, the rand tends to find some cause for weakness,” Shaun Murison, senior market analyst at IG, said.
The full effects of the levy remain to be seen, he added.
Shares of heavyweights Anglo American and Glencore, which have significant exposure to copper, were both up around 4%.
South Africa’s benchmark 2035 government bond also firmed, with the yield down 5.5 basis points to 9.785%.
(Reporting by Sfundo Parakozov; Editing by Jamie Freed and Andrew Heavens)
