South Africa's rand firms against struggling dollar, data could weigh

JOHANNESBURG (Reuters) - South Africa's rand gained against a wobbly dollar on Tuesday after a U.S. government shutdown, although the local currency might not sustain the gains if a PMI survey points to loss of confidence in the local manufacturing sector. The rand traded at 9.9650/dollar by 0659 GMT, up 0.68 percent from its New York close. Government bonds followed suit, pushing the yield for the 2026 benchmark paper 5.5 basis points lower to 7.88 percent and the 2015 issue down four basis points to 6.05 percent. The dollar weakened against a basket of major currencies after the U.S. failed to reach a compromise ahead of the deadline for a looming government shutdown in the world's biggest economy. The rand has held its own despite a report on Tuesday showing South Africa's trade deficit unexpectedly widened to 19.05 billion rand in August, the biggest gap in seven months. "The rand's outperformance is extraordinary when you consider a terrible trade figure and weak Chinese figures that have hit commodities," said Rand Merchant Bank analyst John Cairns. "As long as South Africa runs such a large current account deficit - which yesterday's trade data suggests will be longer than thought - it is still susceptible to a loss of confidence and a run."