South Africa’s Rand Fluctuates Before Manufacturing Data

The rand fluctuated against the dollar before data that may show manufacturing was unchanged in September after five months of expansion and before today’s European Central Bank policy meeting.

The ECB is set to keep its main interest rate on hold, according to the median estimate of 70 analysts in a Bloomberg survey. U.S. growth data today and payrolls figures tomorrow may help investors gauge the Federal Reserve outlook after two papers from central bank officials said the level of slack, or unused capacity, in the world’s biggest economy justifies accommodative policy.

“Today’s data releases and news flow could have significant consequences for the rand,” Theuns de Wet, head of global markets research at Rand Merchant Bank, said in an e-mail. If data on U.S. gross domestic product “surprises on the high side of expectations and the ECB hints at further policy easing, the dollar could find renewed support and the rand could weaken along with it.”

The currency gained as much as 0.2 percent and weakened as much as 0.3 percent before trading little changed at 10.2679 per dollar as of 10:32 a.m. in Johannesburg. Yields on the government’s benchmark bonds due December 2026 fell two basis points, or 0.02 percentage point, 8.18 percent.

The U.S. economy probably grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent increase in the previous three months, according to a Bloomberg survey before today’s report. Data tomorrow may show payrolls climbed by 120,000 in October and the unemployment rate increased to 7.3 percent from 7.2 percent in the previous month, according to a separate survey.

Mining Production

South African factory output was unchanged last month from a year earlier, a report may show at 1 p.m., according to a survey of 15 analysts. Mining production probably rose 8.8 percent, from 2.1 percent, a separate report may show today. The country’s gross foreign exchange and gold reserves dropped to $49.71 billion in October from $50.02 billion the month before, the central bank said today.

Foreign investors sold a net 762 million rand ($74 million) of South African bonds and 439 million rand of stocks yesterday, a third day of outflows, according to JSE Ltd. data.

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net

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

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