Rand firmer as US holiday offers reprieve
The rand clung onto good news out of China as the world’s second-largest economy reported a surprise.
JOHANNESBURG - The rand took advantage of a US market holiday on Monday to claw back more than half a percent in gains versus the dollar, sneaking into firmer territory after a two-session losing streak.
The local unit firmed 0.57 percent to 11.047 by 1420 GMT, reversing two consecutive days of losses in the previous week.
The rand clung onto good news out of China as the world's second-largest economy reported a surprise up-tick in exports and imports, allaying fears that its resource-hungry factories might be stalling.
"The Chinese data will probably only be a short-term support factor," said Jana van Deventer, an economist at ETM Analytics.
"Market participants will keep the less robust global growth outlook by the IMF in the back of their minds, so the rand resilience we saw today will struggle to extend once we see Japan and the US returning to the market."
The IMF cut its 2014 global growth forecast to 3.3 percent from 3.4 percent last week, the third reduction this year as the prospects for a sustainable recovery from the 2007-2009 global financial crisis have ebbed.
With no indicators on the South African calendar until Wednesday's retail sales data and next week's inflation numbers, market watchers were expecting the rand to look overseas for direction, with a resurgent dollar expected to keep emerging market currencies on the back foot.
Local bonds were firmer, with the yield on the benchmark paper maturing in 2026 down 5.5 basis points to 8.06 percent.