The South African Rand gained more than 1% against a softer US Dollar on Monday ahead of South African manufacturing production figures that could provide further clues over the nation’s economic health.
Meanwhile, the US Dollar weakened against major peers at the start of the week ahead of US CPI inflation report for August due out on Wednesday. The CPI numbers could provide more clarity if the US economy may achieve a “soft landing” and if the Federal Reserve may keep interest rates elevated for longer.
“The rand has rolled over, now gaining against all the majors and has switched from underperformer to outperformer,” Rand Merchant Bank analysts wrote in an investor note, cited by Reuters.
“A quiet start to the week, but risks are elevated midweek, starting with U.S. CPI on Wednesday, followed by ECB rate announcement and press conference on Thursday,” the analysts noted.
Rand traders are now expecting the July data on South African manufacturing output due to be released at 11:00 GMT today.
Manufacturing production in South Africa rose 5.5% year-on-year in June, while accelerating from a revised down 2.4% growth in May. June has been the third straight month of industrial activity growth and the rate has been the sharpest since June 2021.
Market consensus points to a 4.4% YoY growth in manufacturing output in July.
As of 9:00 GMT on Monday USD/ZAR was retreating 1.09% on the day to trade at 18.9106. Earlier in the session, the exotic Forex pair went down as low as 18.8694. The latter has been the pair’s weakest level since September 4th (18.7376).
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