JOHANNESBURG: South Africa's rand traded near seven-week highs against the dollar on Wednesday and could strengthen further if consumer inflation data proves to be better than expected.
The rand was at 9.7090 to the dollar at 0651 GMT, down 0.3 percent from its close in New York on Tuesday. It reached a high of 9.6805 earlier in the session after breaking through the key resistance level of 9.80 late on Tuesday.
Statistics South Africa is due to release June CPI data at 0800 GMT. Economists polled by Reuters expect headline consumer inflation to accelerate to 5.7 percent year-on-year in June from 5.6 percent in May.
Expectations that the US Federal Reserve and other global central banks will maintain their accommodative monetary policy for some time are helping emerging market currencies.
"With the world still struggling to make any sort of impression from a growth point of view, the hawkishness that we saw in US interest rates last month has subsided quite a lot," Standard Bank trader Warrick Butler wrote in a note to clients.
"Talk of possible further easing in Europe and the UK has meant that high-yielding currencies are starting to look lucrative against the developed currencies once again."
Government bond yields edged lower, declining 6 basis points on the 2026 paper to 7.945 percent and 8 basis points on the 2015 instrument to 6.03 percent.
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