Week Ahead: South African Manufacturing PMIs to Set Tone for 2026

The South African Rand (ZAR) faces its first major fundamental test of the year as the market prepares for the release of the Absa and S&P Purchasing Managers Indices (PMI). These reports represent the first domestic data points for 2026 and are critical for gauging the health of the continent's most industrialized economy.

Manufacturing Sector under the Microscope

Following a volatile 2025, traders are looking for signs of stabilization in the manufacturing sector.

• Absa PMI: Often viewed as a leading indicator for the broader economy.
• S&P Global PMI: Will offer confirmation on private sector output and new orders.
• USD/ZAR Reaction: Immediate sensitivity to manufacturing data surprises.

The data comes against a backdrop of local concern regarding economic policy, with recent headlines highlighting tensions around BEE policies and trade decisions favoring Chinese imports. While these structural issues are long-term drags, the immediate reaction in USD/ZAR will depend heavily on whether the manufacturing data surprises to the upside.

Technicals

• Traders should monitor USD/ZAR key technical levels.
• A weak PMI print could see the pair test higher resistance levels as economic pessimism regarding 2026 growth prospects takes hold.