Rand eases as manufacturing, mining contract

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Johannesburg - The rand weakened against the dollar on Thursday after data showed manufacturing output had slowed beyond expectations.

Manufacturing output for May contracted by 3.7% year-on-year, more than double what economists polled by Reuters had predicted.

On a month-to-month basis, factory output slipped for a second consecutive month after contracting 1.9% in April.

The rand dropped from a relatively firm overnight close in New York towards the 10.8 mark, before pulling back to trade at 10.7100 per dollar late on Thursday afternoon, 0.4% weaker.

Total mining output for May was also down, dropping by 6.6% year-on-year, in large part due to a major strike in the platinum sector.

"In the run-up to the manufacturing data we already saw the rand under selling pressure. The response to the data is that selling pressure has become more pronounced," said Jana van Deventer, an economist at ETM Analytics.

Power plants

"Investors are becoming increasingly concerned about the domestic growth outlook."

A work stoppage by more than 200 000 workers in the metals sector remains underway, entering its second week.

The strike, led by Numsa, has affected production at major automobile makers, including BMW and General Motors.

Construction of two power plants for Eskom has also been disrupted.

In fixed income, local bonds tracked the weaker currency lower.

The yield on the 2015 paper added 1.5 basis to 6.695%, while the longer-dated 2026 paper added 2.5 basis points to 8.325%.
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Rand - Dollar
14.75
-1.0%
Rand - Pound
20.26
+0.1%
Rand - Euro
17.29
+0.2%
Rand - Aus dollar
10.72
+0.1%
Rand - Yen
0.13
+0.1%
Gold
1,754.62
0.0%
Silver
22.41
0.0%
Palladium
2,019.00
0.0%
Platinum
944.00
0.0%
Brent Crude
75.34
-0.4%
Top 40
56,605
-0.9%
All Share
62,864
-0.7%
Resource 10
56,497
-3.9%
Industrial 25
81,170
+1.0%
Financial 15
14,018
+0.5%
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