Key points
- USD/ZAR pulls back from Friday’s 1-month high
- South Africa manufacturing and mining data for May awaited for clues over economy
The South African Rand extended a pullback from last week’s 1-month low on Tuesday ahead of South African manufacturing production figures that could provide further clues over the nation’s economic health.
Meanwhile, the US Dollar was a notch weaker against major peers on Tuesday, as market players scaled back expectations over the Federal Reserve’s rate hike path.
Yesterday Fed officials indicated that the central bank was approaching the end of its tightening cycle.
Rand traders are now expecting the May data on South African manufacturing output due to be released at 11:00 GMT today.
“Expectations are for a further weakening in the y/y growth rate in May, and this trend is likely to remain in place even with better load-shedding (power cut) conditions in June and July,” ETM Analytics wrote in an investor note, cited by Reuters.
Manufacturing production in the country rose at an annual rate of 3.4% in April, the first increase since October 2022, as industrial firms have been reducing their reliance on power utility Eskom via self-generation initiatives.
South Africa’s mining output will be another closely watched data print, with the official May figures expected at 9:30 GMT on Thursday.
Mining production increased at an annual rate of 2.3% in April, while marking the first month of activity growth after 14 successive months of decreases.
As of 7:24 GMT on Tuesday USD/ZAR was losing 0.51% to trade at 18.6914. Last Friday, the exotic Forex pair went up as high as 19.1523. The latter has been the pair’s strongest level since June 7th (19.3032).
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