JOHANNESBURG: The South African rand was weaker in early trade on Thursday, ahead of U.S. economic data readings that could give hints on the future interest rate path of the world’s biggest economy.
At 0631 GMT, the rand traded at 18.42 against the dollar , about 0.2% weaker than its previous close.
Markets await a U.S. gross domestic product reading on Thursday and personal consumption expenditure data - the Federal Reserve’s favoured measure of inflation - on Friday. These readings could give hints on the country’s the future interest rate path.
“Ahead of this afternoon’s much anticipated U.S. data… markets have seen risk off sentiment increase and thus EM (emerging market) currencies remain on the back foot,” said Andre Cilliers, currency strategist at TreasuryONE.
South African rand extends losses, focus on local inflation data
“The rand… could possibly test the R18.50 mark in the current market conditions, with headwinds for commodity currencies also flaring up,” Cilliers added.
Like other risk-sensitive currencies, the rand often takes cues from global factors in addition to domestic drivers.
Locally, investors will turn their attention to South Africa’s producer inflation figures for June, expected around 0930 GMT.
On Wednesday, Statistics South Africa data showed headline consumer inflation eased to 5.1% year-on-year in June from 5.2% in May.
South Africa’s benchmark 2030 government bond was slightly stronger in early deals, as the yield slipped 0.2 basis point to 9.5%.
Comments
Comments are closed.