South Africa's rand lifted by EM demand, manufacturing surprise
* Rand rallies 3% from last week's plunge
* Financial stocks track firmer currency
* Tiger Brands leads rally by consumer firms
(Adds latest figures, analyst quotes)
JOHANNESBURG, June 11 (Reuters) - South Africa's rand
rallied more than 1% on Tuesday, stretching its rally back from
a nine-month low as cooling trade war worries and much
larger-than-expected growth in local manufacturing boosted the
battered currency and equities.
At 1515 GMT the rand was 0.88% firmer at 14.7000
per dollar, a touch off its session-best of 14.6550 reached just
as New York trading got underway, with sentiment on the side of
emerging currencies following the tariff deal between Washington
Manufacturing output in April grew by a consenus-beating
4.6% year-on-year according to Statistics South Africa, as
industries blighted by the nationwide power outages of the first
quarter bounced back sharply.
"The rand got a little lift from the data but it's mainly
being driven by trade factors, which is why you're seeing other
EMs firmer today. Plus the noises about the central bank are
filtering out too," said Wichard Cilliers, chief trader at
Last week the rand sank to its weakest since September after
data showing growth contracted in the first quarter was almost
immediately followed by a bitter public spat among senior ruling
African National Congress officials over the Reserve Bank's
"We might see the rand even go below 14.60 if things stay as
calm as this," Cilliers said.
Bonds also firmed, with the yield on the 2026 government
issue down 8.5 basis points to 8.33%, its lowest level
since May 2018.
Markets are also increasing bets of a rate cut by the
Federal Reserve, helping spur demand for emerging market assets
offering chunkier returns.
On the bourse, stocks rose with the benchmark JSE Top-40
Index up 0.57% to 52,656.33 points and the broader
All-Share Index closing 0.42% higher at 58,727.73
Manufacturing companies topped the blue-chip index with
consumer goods manufacturer Tiger Brands rising 2.69%
and paper packaging company Mondi PLC up 1.17%.
Financial companies were among the biggest blue-chip
winners, with Capitec Bank up 2.25% and insurance
company Discovery closing 1.68% higher on the back of
the firmer rand.
(Reporting by Mfuneko Toyana and Naledi Mashishi; Editing by
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