JOHANNESBURG: The South African rand was slightly weaker in early trading on Monday, after gaining last week, ahead of the release of domestic inflation data on Wednesday which may provide hints on the country’s future interest rate path.
At 0631 GMT, the rand traded at 17.8775 against the dollar, about 0.1% softer than its closing level on Friday.
The dollar was down about 0.38% against a basket of global currencies.
Investors will look to South Africa’s July inflation figures on Wednesday for hints on the central bank’s future interest rate path.
“Investors will be watching closely at the number to see if inflation is softening enough for the central bank to begin cutting rates in September,” said Rand Merchant Bank analysts in a research note.
A Reuters poll found that economists expect the central bank to cut interest rates for the first time in more than two years on Sept. 19.
This week, global markets will likely focus on the release of minutes from a Federal Reserve meeting and the Jackson Hole symposium of central bankers where Fed Chair Jerome Powell will give a speech.
South African rand slips against the dollar
Like other risk-sensitive currencies, the rand often takes cues from global drivers like US monetary policy in addition to local factors.
South Africa’s benchmark 2030 government bond was slightly firmer in early trading, and the yield slipped 2.5 basis points to 9.295%.
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