JOHANNESBURG: South Africa’s rand weakened early on Wednesday ahead of domestic and U.S. inflation readings which could give clues on the future interest rate path of both countries.
At 0711 GMT, the rand traded at 17.85 against the U.S. dollar, about 0.2% softer than its previous close.
Markets will look to November consumer inflation data out of the world’s biggest economy on Wednesday to challenge or cement bets of an interest rate cut by the Federal Reserve next week. Markets expect a 25-basis-point cut on Dec. 18.
Likewise, South Africa-focussed investors will at 0800 GMT look to the November inflation print for hints on the policy path of its central bank when it meets in January.
South African rand softens at start of data-filled day
Economists polled by Reuters expect South Africa’s inflation to accelerate to 3.1% year on year in November, up from 2.8% recorded in October.
At 1100 GMT, focus will be on South Africa’s October retail sales figures.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index was down about 0.5% in early trade.
South Africa’s benchmark 2030 government bond was flat in early deals, with the yield at 8.97%.
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