JOHANNESBURG: South Africa's rand traded firmer against the U.S. dollar on Wednesday, pulling further away from Monday's six-year low, although market watchers expected pressure to resume if inflation and retail sales data came in worse than expected.
At 0838 GMT, the rand traded at 11.4350 to the greenback, slightly firmer than Tuesday's New York close at 11.4545.
The yield for the heavily traded government bond due in 2026 was flat at 7.835 percent.
The rand has reclaimed about 1.2 percent of its value since plunging more than 2 percent to 11.5750 on Monday, a level last seen in October 2008, after central bank data showed a yawning third quarter current account deficit of 6 percent of GDP.
Because of South Africa's persistently high current account and budget deficits, the rand tends to take the heaviest hit among peers when investors' appetite for high-yielding but riskier emerging markets wanes.
"The rand is back on its feet but, as pressures from the U.S. dissipate, new concerns emerge from Europe and China," RMB currency analyst John Cairns said, referring to dim economic prospects for South Africa's key trading partners.
On the domestic front, investors were also worried about renewed electricity shortages, which state utility Eskom says could last for some time.
The power crunch could trigger another credit downgrade from ratings agency Fitch, which, along with Standard and Poor's, will issue its latest review on South Africa on Friday.
More immediately, traders were looking to CPI inflation data at 0800 GMT and retail sales numbers out at 1100 GMT.
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