The rand retreated for a second day on speculation South Africa’s manufacturing contracted, adding to evidence of a slowdown in the continent’s biggest economy.
The Kagiso purchasing managers index probably declined for a second month in March, staying below the 50 level that indicates expansion, a report will show at 11 a.m., according to the median estimate of economists in a Bloomberg survey. U.S. manufacturing grew in April at the slowest pace this year, while Chinese and Australian reports yesterday signaled a slowdown in factory output.
“Today’s focus will fall on the PMI in light of disappointing releases in the U.S., China and Australia,” Carmen Nel, a Cape Town-based analyst at Rand Merchant Bank, said in e-mailed comments today.
South Africa’s currency depreciated 0.2 percent to 9.0409 per dollar as of 9:24 a.m. in Johannesburg. Yields on benchmark 10.5 percent bonds due December 2026 dropped three basis points, or 0.03 percentage point, to 6.71 percent.
The European Central Bank will today lower its benchmark rate by 25 basis points to a record low 0.5 percent today, according to 44 of 70 economists in a Bloomberg survey.
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