South African rand strengthens against the dollar

JOHANNESBURG (Reuters) -The South African rand strengthened on Monday, recovering some losses incurred last week along with other emerging market currencies.

At 1523 GMT, the rand traded at 18.7350 against the dollar, 0.48% higher than its closing level on Friday.

The dollar last traded at 102.98, around 0.03% stronger against a basket of global currencies.

The rand seemed unperturbed by a local survey on Monday, which showed South African manufacturing activity contracted for the fifth consecutive month in June due to a worsening of business conditions.

However, analysts warned that the risk-sensitive rand was susceptible to further weakness in the near-term amid hawkish tones by central banks around the world including the Federal Reserve.

“The minutes of the last FOMC meeting are due out on Wednesday, and will allow markets to more deeply scrutinise the reasoning of US monetary policy makers, and attempt to glean insight on the likely length of the pause in the cycle,” said Investec analyst Annabel Bishop in a research note.

Shares on the Johannesburg Stock Exchange rose slightly, with both the broader all-share index and the Top-40 index closing around 0.3% higher.

South Africa’s benchmark 2030 government bond was slightly stronger, with the yield down 1 basis point to 10.500%.

(Reporting by Tannur Anders and Bhargav Acharya; Editing by Anait Miridzhanian & Shri Navaratnam)