South African rand jumps after producer inflation, jobs data

JOHANNESBURG (Reuters) -South Africa’s rand gained against the softer dollar on Thursday after data showed producer inflation fell more than expected in November and formal sector jobs rose in the third quarter.

At 1230 GMT, the rand was trading 18.5100 against the dollar, over 0.8% stronger than its previous close.

The dollar index hit a four-month low and was last down 0.52% against a basket of currencies after the U.S. Federal Reserve held interest rates steady and struck a dovish tone on Wednesday.

South Africa’s formal sector employment, excluding agriculture, rose 0.3% quarter-on-quarter to 10.176 million people in the third quarter, while annual producer inflation slowed to 4.6% in November from 5.8% in October, Statistics South Africa said.

The petrol and diesel price cuts implemented in November, with additional reductions in December offered producers reprieve, said Investec economist Lara Hodes.

Separately, the cost of insuring South Africa’s debt against default fell by 10 basis points to a 20-month low of 220 basis points on Thursday, according to data from S&P Global Market Intelligence.

Shares on the Johannesburg Stock Exchange rose, with the blue-chip Top-40 index last trading over 3.3% higher.

The yield on South Africa’s benchmark 2030 government bond jumped 29.5 basis points to 9.765%.

(Reporting by Bhargav Acharya; Editing by Subhranshu Sahu and Tomasz Janowski)