Rand slips on Chinese factory data

THE rand remained on a weaker footing against the dollar yesterday, weighed down by fears over disruptions to the national electricity supply and by weaker-than-expected Chinese manufacturing data.

The rand was at 9.2800 to the dollar at 8.30am, down 0.6 percent from yesterday’s close in New York.

It weakened yesterday after Eskom said it was prepared to introduce rolling blackouts this winter in some parts of the grid to prevent a complete system collapse, which would inflict far greater damage on the economy.

The rand was also pushed lower after data showed growth in the factory sector of the world’s second-largest economy dipped this month as new export orders shrank.

“The rand moved this morning based primarily on the weaker Chinese data,” said Absa Capital trader Duncan Howes. “Given that China is South Africa’s largest trading partner it can have a fairly substantial effect on our trade.”

Howes said domestic factors would keep the rand under pressure in the short term and that it was likely to trade in the 9.22-9.34 range.

Government bonds firmed, with the yield on the 2015 paper declining 6 basis points to 5.29 percent and that on the 2026 instrument falling 1.5 basis points to 6.885 percent.

South Africa’s Treasury will auction R2.35 billion of its 2023, 2036 and 2041 government bonds later today. – Reuters