JOHANNESBURG: South Africa's rand firmed against the dollar on Monday as the U.S. currency took a breather from its sharp gains but investors remained wary ahead of data expected to give an indication of how the domestic economy was performing.
The rand was trading 0.31 percent stronger at 12.4440 to the dollar as of 1443 GMT, against a New York close of 12.4825 on Friday.
In fixed income, government bonds also gained and the yield for the 2026 benchmark fell 5 basis points to 7.940 percent.
Current account deficit figures due on Tuesday and inflation data scheduled to be released on Wednesday are expected to show growth conditions in Africa's most advanced economy, and analysts said bad numbers could push the currency lower.
The current account gap sits at 6 percent of GDP and has been cited by ratings agencies as a major constraint on growth and a risk for the country's credit status.
Analysts predict the current account gap will slightly narrow to 5.8 percent of GDP, according to a Reuters poll.
"The only marginal narrowing in the Q4 2014 current account deficit is likely to keep the rand on the back foot this week - particularly against the USD which continues to show its mettle against most emerging market currencies," BNP Paribas Cadiz Securities analyst Jeffrey Schultz said in a note.
Year-on-year inflation for January was at 4.4 percent, with a Reuters poll predicting the headline to drop further to 3.8 percent in February, as global oil prices remain low.
Globally, investors were looking at the U.S. Federal Reserve's two-day policy meet that begins on Tuesday for clues on how soon it could raise interest rates.
Comments
Comments are closed.