South African rand jumps on encouraging Chinese data

JOHANNESBURG (Reuters) -The South African rand extended gains against a weaker dollar on Monday as encouraging economic data from China aided some emerging market currencies.

At 1542 GMT, the rand traded at 18.8775 against the dollar, 1.35% stronger than its previous close.

The dollar last traded around 0.27% weaker against a basket of global currencies.

Strong lending data and fresh stimulus measures from China – South Africa’s biggest trading partner – supported risk-sensitive currencies such as the rand.

Locally, the currency seemed little affected by South Africa’s manufacturing output figures, which rose 2.3% year on year in July after rising by a revised 5.9% in June.

In the absence of major local economic data points, investors this week will turn their focus towards U.S. inflation data due on Wednesday.

“Risks are elevated midweek, starting with U.S. CPI on Wednesday, followed by ECB rate announcement and press conference on Thursday,” RMB analysts said in a research note.

Inflation data out of the U.S. could give clues on the Federal Reserve’s interest rate path before it convenes next week and might influence the risk-sensitive rand.

Shares on the Johannesburg Stock Exchange rose, with the blue-chip Top-40 index ending 0.73% higher.

South Africa’s benchmark 2030 government bond was marginally weaker, with the yield up 1.5 basis points at 10.390%.

(Reporting by Tannur Anders and Bhargav Acharya; Editing by Anait Miridzhanian, Mark Heinrich and Andrea Ricci)