The South African rand erased early losses against the greenback on Friday and was on track for a fourth straight daily gain after weak US data knocked the dollar back. Analysts said hopes of a wage deal in South Africa's public sector also provided a fillip for the local currency, as this would avert a potentially crippling strike. At 1501 GMT, the rand traded at 11.7700 to the dollar, up slightly from 11.7820 - the level at which it ended the New York session on Thursday. It was off Friday's low of 11.8800.
The move higher reflected the dollar's weakness after a disappointing US consumer sentiment report. "Earlier, players were just being cautious as a whole ahead of all the US data this afternoon (Johannesburg time), but it has once again proved to be soft and so the rand rally has continued," said Christopher Shiells, an analyst at Informa Global Markets.
Traders and analysts said the rand could be headed for some volatility in the coming week, laden with key domestic data including unemployment, consumer inflation retail sales, culminating in Thursday's rates decision. All but one out of 33 economists polled by Reuters expected the central bank to keep the main lending rate at 5.75 percent, but the tone of its policy statement will give clues on whether policy tightening could be on the cards later in the year. South African government bonds were firmer on Friday, with the yield on the 2026 benchmark paper easing 6 basis points to 7.975 percent.
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