South African rand jumps on encouraging domestic data

The South African Rand jumped on Thursday 8 June, clinging to gains made since the start of the week on the back of a weaker US dollar and encouraging domestic data. At 1512 GMT, the Rand was trading at 18.8600 against the US dollar, more than 1.2% stronger than the previous session's closing price.

The dollar last traded at 103.390 against a basket of global currencies - about 0.63% weaker. The South African rand briefly strengthened on Wednesday, falling below 19 rand to the dollar for the first time in three weeks, also buoyed by the easing of rolling blackouts.

Data released by the South African Reserve Bank on Thursday showed the country's current account deficit (ZACAGP=ECI) narrowed to 1% of gross domestic product in the first quarter. South Africa's manufacturing output rose 3.4 per cent year-on-year in April after falling 1.8 per cent in March, data from the statistics agency showed. The rand has been recovering after a turbulent May when it plunged more than 7% against the US dollar on record power cuts and US accusations that South Africa was supplying arms to Russia.

Despite this, investor sentiment remains subdued, with survey data on Wednesday showing business confidence at a three-year low. On the Johannesburg Stock Exchange, the blue-chip Top-40 Index (.JTOPI) closed almost 0.2 per cent lower. South Africa's local benchmark 2030 bond strengthened slightly, with the yield down one basis point at 10.830%.