The rand firmed against the dollar on Thursday, helped by a stronger euro and better-than-expected domestic manufacturing output data.

The rand was at R10.7400/$ at 14:54 GMT, up 0.6% from Wednesday’s New York close.

The rand strengthened as the euro, the currency of South Africa’s biggest trading partner, rose to a 2-1/2 year high against the dollar.

“If their (the euro zone’s) economy picks up, ours should react in tandem,” said Bidvest Bank chief dealer Ion de Vleeschauwer.

Locally, manufacturing output rose 2.5% year-on-year in volume terms in January after a revised 2.8% in December, Statistics South Africa said on Thursday.

Economists polled by Reuters had expected year-on-year growth of 1.95% and 0.2% on a month-on-month basis.

Government bond yields declined, with those on the 2026 and 2015 instruments falling 4.5 basis points to 8.55% and 7.015% respectively.