South African Rand coins are seen in this illustration picture taken October 30, 2020. REUTERS
JOHANNESBURG, May 4 (Reuters) – The South African rand was flat in early trade on Monday ahead of the release of a local manufacturing purchasing managers’ index (PMI) and vehicle sales data for April.
- At 0639 GMT the rand traded at 16.6075 against the dollar , broadly unchanged from its previous close.
- An Absa PMI survey is set to be released at 0900 GMT and will shed light on manufacturing conditions in Africa’s most industrialised economy.
- South African manufacturing sentiment remained weak in March, with respondents expressing concern about the impact of the Iran war although business activity is yet to take a serious knock.
- Investors will then turn their focus to vehicle sales data due around 1200 GMT, which will give a snapshot of consumer demand for big-ticket items.
- Nedbank economists, in a research note, said they expect car sales to contract by 16% in April, largely reflecting more public holidays than in March and softer demand amid uncertainty over the war in Iran.
- “Higher fuel prices and a shifting interest rate outlook are likely to weigh on consumer confidence and, in turn, vehicle demand. Even so, the decline comes off a high base,” said the note.
- South Africa’s benchmark 2035 government bond was stronger in early deals, as the yield fell 3.5 basis points to 8.76%.
Reporting by Sfundo Parakozov; Editing by Louise Heavens
