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China October Manufacturing PMI 50.8; Est. 51.2
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Rand Falls for Second Day as Metals Retreat on China Data, U.S.

The rand weakened for a second day as commodities declined after China’s manufacturing industry shrank and a rise in U.S. jobless claims increased speculation that the Federal Reserve will stimulate economic growth.

South Africa’s currency declined as much as 0.5 percent and traded 0.4 percent weaker at 8.3460 per dollar as of 8:52 a.m. in Johannesburg. Yields on the nation’s 6.75 percent bonds due 2021 rose one basis point, or 0.01 percentage point, to 6.75 percent.

The preliminary reading for a purchasing managers’ index for China released by HSBC Holdings Plc and Markit Economics fell to 47.8 in August, the 10th month below 50. Europe accounts for more than 20 percent of China’s exports. Minutes of the U.S. central bank’s latest policy meeting released yesterday showed officials remain supportive of a third round of asset purchases under quantitative easing, or QE, as unemployment has been mired at more than 8 percent since 2009.

“The rand has been pushed weaker by poor global data and uncertainty over QE3,” John Cairns and Josina Solomons, currency strategists at Rand Merchant Bank in Johannesburg, said in e-mailed comments. “PMI figures from China were unquestionably weak.”

Three-month copper declined as much as 1 percent, trimming a third weekly advance. Standard & Poor’s GSCI index of commodities retreated 0.4 percent, a second day of losses. Metals and other commodities account for 45 percent of South Africa’s total exports, according to government data.

To contact the reporter on this story: Stephen Gunnion in Johannesburg at sgunnion@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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