• China is South Africa's main trading partner and it released strong manufacturing activity data
  • The Rand unit traded at 18.1575 against the dollar, about 1% stronger than its previous close
  • JSETop-40 index closed 1.27% higher and the broader all-share index rose 1.15%, adding to the currency appreciation

Harare-The South African Rand regained value against the US dollar on Wednesday, March 1st, as data from China bolstered the value of the Rand. The unit traded at 18.1575 against the dollar, about 1% stronger than its previous close.

The Rand has seen a modest recovery in value since the start of the year, as global markets have rallied and the currency remains well below its all-time high of R19.60 set in December last year.

China is South Africa's main trading partner, so favourable news about its economy often lifts the value of South African assets.

This was the case on Wednesday, as China reported its fastest expansion in manufacturing activity since April 2012, boosting global risk appetite.

In September 2022, Beijing issued a mandate requiring companies operating in China to obtain approval from the Chinese government before exporting any locally generated data outside of its borders, thus giving China accountability capacity for manufacturing companies.

This move is part of a wider effort to strengthen data security in the midst of increasing geopolitical tensions between China and the West and has affected multiple currencies other than the Rand.

The safe-haven US dollar weakened after the resurgence in China, weighed down by firmer commodity currencies that benefited from China's strong manufacturing activity data, as well as gains in the euro after German inflation soared last month and raised rate hike expectations in the euro zone.

Also, along with the Australian and New Zealand dollars, China's yuan rose after data showed expanded manufacturing activity that came at its fastest pace in a decade, smashing expectations.

The JSE Top-40 index closed 1.27% higher, and the broader all-share index rose 1.15%, adding to the currency appreciation favoring the exchange. Aspen Pharmacare saw its shares jump 13% after announcing it was close to securing new contracts to restart its COVID-19 vaccine production, which had been temporarily halted.

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