JOHANNESBURG, Oct 1 (Reuters) – The South African rand strengthened on Wednesday, supported by upbeat purchasing managers’ index data for the local manufacturing sector and a softer U.S. dollar.
At 1423 GMT the rand traded at 17.1850 against the dollar , roughly up 0.4% on Tuesday’s close and at its strongest level in a year.
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South African manufacturing sentiment improved in September, driven by strong domestic demand, the Absa PMI showed.
“The domestic market drove the recovery as global demand remained under pressure and is complicated by steep U.S. tariffs, a challenging trading environment, and lingering SA port issues,” Absa said in a statement.
The greenback last traded about 0.3% weaker against a basket of currencies as a U.S. government shutdown unsettled markets and threatened to delay key jobs data, seen as crucial for Federal Reserve policy decisions.
Nedbank economists said in a research note that they expected vehicle sales to have remained strong in September “underpinned by easier financial conditions due to interest rate cuts, lower debt service costs and subdued prices”.
In fixed income, government bonds also firmed, as the yield for debt maturing in 2035 fell 2 basis points to 9.16%.
Reporting by Sfundo Parakozov and Anathi Madubela; Editing by Alex Richardson