JOHANNESBURG: South Africa's rand retreated slightly against the dollar on Wednesday, although traders did not expect it to break out of current ranges ahead of the release of US Federal Reserve minutes.
Domestic consumer inflation data set to be released at 0800 GMT was unlikely to impact the currency much, with economists polled by Reuters expecting the year-on-year rate to have stayed unchanged at 5.9 percent in October.
This would be within the Reserve Bank's 3-6 percent target band, backing the case for policy makers to keep the benchmark repo rate stable at 5.75 percent on Thursday, when the central bank's three-day policy meeting concludes.
At 0640 GMT the rand stood at 11.0500 to the greenback, just 0.17 percent softer than its close on Tuesday in New York.
With domestic interest rates likely to be anchored at 5.75 percent into the into the new year, Federal Open Market Committee minutes due later on Wednesday are most likely to give the market direction in the session, Standard Bank trader Inshaan Omar said. "This will be keenly watched for clues of when the US will commence with its hiking cycle," Standard Bank's Omar said in a note.
Government bonds were also mostly flat, with the yield for the benchmark government bond maturing in 2026 dipping just 1 basis point to 7.81 percent.
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