Rand extends gains as PMI data slides less than expected
The local currency pared losses after weakening to as much as R14.44/$ earlier on Wednesday, a level not seen since December 18
The rand was leading its emerging-market peers in gains on Wednesday morning as local manufacturing data declined less than expected.
The local currency pared earlier losses after weakening to as much as R14.44/$ during intraday trade, a level it has not seen since December 18. The rand's weakness was prompted by an escalation in the Middle East conflict after Iran fired ballistic missiles at a US military base in Iraq. That tension continues to weigh on global market sentiment.
“We can expect ongoing volatility throughout the day as investors await further developments,” TreasuryOne senior currency dealer Andre Botha said.
Absa's manufacturing purchasing managers' index (PMI) for December slid to 47.1 points from 47.7 in November, data showed on Wednesday. The median forecast according to a Bloomberg poll was for PMI to have slipped to 45.5 points.
At 11.08am, the rand had firmed 0.49% to R14.2444/$, 0.64% to R15.8599/€ and 0.16% to R18.7452/£. The euro had weakened 0.15% to $1.1134.
The R2030 government bond was weaker with the yield rising 1.5 basis points to 9.05%. Bond yields move inversely to bond prices.
Gold was up 0.45% to $1,580.49/oz while platinum was down 1.12% to $962.4/oz. Brent crude added 0.18% to $68.48 a barrel.