Rand slips 0.2% as South Africa awaits PMI data and October fuel price adjustment

The South African rand weakened in early trading on Monday, October 5, as local investors waited for the September whole-economy purchasing managers' index and the October fuel price adjustment. At 0619 GMT the rand traded at 16.6825 against the dollar, about 0.2% down from its previous close.

PMI in focus

Domestic investors will look to the September S&P Global whole-economy PMI at 0715 GMT for clues on business conditions in South Africa. A manufacturing PMI released recently showed sentiment improved in September after three months of contraction, helped by a rebound in new orders.

Fuel prices set to rise

Later in the day, the Department of Petroleum Resources is expected to announce the monthly fuel price adjustment. Analysts have warned consumers to prepare for petrol prices to rise by about 3.29 rand per litre, with diesel prices up by around 3.19 rand per litre.

ETM Analytics said the weaker rand and higher oil prices were feeding directly into pump prices. "The combination of much higher oil prices and the depreciation of the ZAR has heavily impacted prices, which will now exert further inflationary pressure on the system," the firm said in a note.

Bonds soften

South Africa's benchmark 2035 government bond was slightly weak in early deals, with the yield rising 2 basis points to 8.88%.