JOHANNESBURG: South Africa's rand fell to a one-week low against the dollar on Friday as the greenback was bolstered by US inflation data that raised hopes of a rate hike, while local power cuts and anti-immigrant unrest hit sentiment.
At 1428 GMT, the rand was trading 0.71 percent weaker at 12.0480 to the dollar compared with its closing level on Thursday and also at its softest levels since April 9, according to Thomson Reuters data.
"What we saw with the US CPI data is that the headline number was slightly softer than expected," said Jana van Deventer, a market analyst with ETM Analytics.
"But the core inflation surprised to the top side which appears to have triggered some renewed speculations surrounding hawkish Fed risks and the timing of US interest rates hikes."
Analysts are still pricing in just one US rate increase this year, sometime late in the fourth quarter.
Traders and analysts were also closely watching the negative news flow from South Africa, including the power shortages and anti-immigrant attacks.
"As long as these issues remain unresolved, investors are likely to continue to display some caution towards South Africa and perhaps display some reluctance to embark on any long term investments," Van Deventer said. Government bonds tracked the currency weaker, and the yield for the 2026 benchmark was up 10 basis points to 7.875 percent.
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