JOHANNESBURG (Reuters) – South Africa’s rand traded slightly weaker early on Tuesday ahead of manufacturing and economic growth figures poised to reveal if last year’s recovery has been sustained.
South African Rand coins are seen in this photo illustration taken September 9, 2015. REUTERS/Mike Hutchings/File Photo
At 0640 GMT the rand was 0.14 percent weaker at 12.5825 per dollar, dipping in overnight trade after a rally on Monday that lifted the currency as high as 12.5200, a short-term technical level that could unlock further gains.
Monday’s run was mostly spurred by a global return of risk appetite as the political logjam in Italy was resolved with the formation of a coalition government in Rome on Friday.
That pushed the euro to a two-week best, and emerging market assets followed.
A drop in U.S. bond yields, with sentiment there riled by another twist in the trade war with China warning the United States against tariffs, saw some money flow back into E.M. debt.
The yield on Pretoria’s benchmark bond due in 2026 was up 1.5 basis points at 8.585 percent.
Traders remain cautious, wary of a dollar bounce ahead of next week’s Federal Reserve meeting, and local gross domestic product numbers due later in the session.
Likely ranges between 12.4500 to 12.7000.
Stocks are set to open slightly lower, with the Johannesburg Top-40 futures index down 0.13 percent.
Reporting by Mfuneko Toyana; Editing by Joe Brock