Rand Holds Steady at 16.61 Despite Weak Manufacturing Data

The South African rand held steady on Thursday, October 8, despite weaker-than-expected manufacturing data, supported by a subdued dollar as investors assessed the likelihood of another US Federal Reserve interest rate hike this year. At 1410 GMT, the rand traded at 16.6149 against the dollar, little changed from its previous close.

South Africa’s manufacturing output fell 4.3% year-on-year in August, after rising by 1.1% year-on-year in July, statistics agency data showed. Analysts polled by Reuters had expected a 0.6% year-on-year increase. Nedbank economists predicted the slip back into contraction after July’s temporary rebound.

Manufacturing Under Pressure

Nedbank said the sector remains under pressure from high input and power costs. US tariffs, fuel price hikes and supply shortages continue to weigh on production and competitiveness, the bank added.

Global Cues Dominate Rand Direction

The dollar was flat against a basket of currencies. Traders assessed the likelihood of another Federal Reserve rate hike this year after minutes from the September meeting revealed divisions among policymakers over the need for further monetary policy tightening.

In common with other risk-sensitive currencies, the rand often takes cues from global drivers such as US economic indicators and monetary policy, in addition to domestic economic data.

Market Moves

On the Johannesburg Stock Exchange, the Top-40 index was last up 0.3%. South Africa’s benchmark 2035 government bond weakened, with the yield rising 2 basis points to 8.855%.