South Africa’s rand strengthened early on Monday, helped by an improvement in sentiment toward emerging markets after China reported strong industrial growth data, easing some of last week’s fears about a slower rebound in global growth.
At 0645 GMT the rand ZAR=D3 was 0.55% firmer at 17.0550 per dollar after it weakened almost 6% to a one-month low last week in a broad sell-off triggered by signs of a second wave of coronavirus infections in Europe.
Profits at China’s industrial firms grew for the fourth straight month in August, buoyed in part by a rebound in commodities prices and equipment manufacturing, its statistics office said on Sunday. world’s second biggest economy is seen as a bellwether for the health of emerging market economies as it generates a large chunk of export demand, mainly for commodities.
Some caution trading is expected ahead of Tuesday’s presidential debate in the United States with some profit-taking on the dollar.
Locally, with no major data releases besides producer price data at 0930 GMT, the rand is set to remain in range and struggle to break below the 17.00 mark, its most recent technical barrier.
Bonds were slightly firmer, with the yield on the benchmark 2030 government issue ZAR2030= down 1.5 basis points to 9.51%.