There was little movement in the rand on Monday, and the dollar weakened marginally as safe-haven demand tapered down.
Bianca Botes, a director at Citadel Global, said in a note on Monday that this week’s upcoming data had markets keeping a bias for a stronger dollar as they braced for what was expected to be another strong gross domestic product reading and hot personal consumption expenditures print.
“This will erode any hope for an interest rate cut by the Fed (US Federal Reserve) in June,” she said.
“On the data front, we will keep an eye on the local leading indicator index today, followed by EU, UK and US PMI. This evening, we will also turn our attention to the SARB (SA Reserve Bank) monetary policy review, that will provide insight into the SARB’s projections for the South African economy, Botes said.
The rand is trading weaker this morning, at R19.17 to the dollar, R20.43 to the euro and R23.69 to the pound.
The rand at 11.02am was at R19.23, 0.12% weaker.
Trading Economics said the JSE index was up for the fourth consecutive session on Tuesday, trading above the 74 000 points level, tracking most of its global peers.
On the domestic economic front, South Africa's leading indicator rose by 1.7% over a month in February, central bank data showed. Among single stocks, Capitec was the top advancer with gains of over 7%, after the bank reported strong results for its financial year through February 2024.
Heavyweight tech Naspers and Prosus followed suit, up 5.2% and 4.6%, respectively, due to their stakes in Tencent. After announcing the release of its highly anticipated "Dungeon and Fighter" mobile game on May 21 following seven years of development, the shares of the Chinese tech giant surged by 4.5%. Conversely, resource-linked sectors underperformed.
In data, the composite leading business cycle indicator in South Africa rose by 1.7% month-on-month in February 2024, recovering from a downwardly revised 0.2% decrease in the previous month, Trading Economics said.
This marked the first expansion since October 2023, as increases in five of the ten available component time series outweighed decreases in the remaining five. The key positive contributors were an acceleration in the six-month smoothed growth rate in job advertisement space, and an increase in the number of residential building plans approved.
Meanwhile, the largest negative contributors were a decrease in South Africa’s US dollar-denominated export commodity price index and the average hours worked per factory worker in the manufacturing sector.
BUSINESS REPORT