Rand Climbs From Five-Week Low Ahead of Producer Price Data

The rand strengthened for the first time in four days, climbing from its lowest level in five weeks, before the release of producer price inflation data.

The currency advanced 0.1 percent to 9.0680 per dollar by 10:42 a.m. in Johannesburg, after declining 3 percent in the prior three days, the worst performer among emerging-market peers. Yields on benchmark government 10.5 percent bonds due December 2026 were little changed at 7.37 percent today.

The median estimate in a Bloomberg survey of seven economists was for producer price inflation to be 5.4 percent in January. The data will be released at 11:30 a.m. local time. The rand slumped after the South African Revenue Service said on Feb. 28 that the trade gap reached 24.5 billion rand ($2.7 billion) in January, compared with 2.7 billion rand in December, more than the 9.7 billion rand median estimate of economists in a Bloomberg survey.

“The rand has been under pressure since news of the trade gap last week, so some retracement can be expected,” Ion de Vleeschauwer, the Johannesburg-based chief dealer at Bidvest Bank Ltd., said by phone. “Rand volatility is certainly here for a while.”

The rand’s three-month implied volatility against the dollar was 12.91 percent, compared with 12.28 percent a week ago.

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