South African rand steady before local inflation reading
- the rand traded at 16.68 against the dollar , a whisker away from its previous close
JOHANNESBURG: The South African rand was steady in early trade on Wednesday, ahead of the release of inflation data which is expected to reflect pressures from the war in the Middle East.
At 0619 GMT the rand traded at 16.68 against the dollar , a whisker away from its previous close.
Statistics South Africa will publish April inflation data (ZACPIY=ECI), opens new tab at around 0800 GMT, with analysts polled by Reuters expecting it to accelerate to 3.9% year on year, up from 3.1% in March.
Nedbank economists estimate a higher reading of 4.4%, driven mainly by a sharp increase in transport costs due to rising fuel prices.
As a net fuel importer, South Africa is heavily exposed to the spike in global energy prices.
The statistics agency will also release retail sales (ZARET=ECI), opens new tab numbers at around 1100 GMT, although analysts say the March figures are unlikely to show weakness as they predate the full escalation of the Iran war.
Retail sales rose 1.6% year on year in February, with analysts predicting a 2.5% increase in March.
“Household spending at that time would have been supported by the favourable inflation backdrop, easier financial conditions and improving sentiment prior to the full effect of the onset of the Iran war,” Nedbank economists said.
The US dollar was flat against a basket of currencies as global traders continued to track developments in the Middle East and a visit by the Russian leader to China.
South Africa’s benchmark 2035 government bond was slightly stronger in early deals, with the yield falling 1.5 basis points to 8.915%