JOHANNESBURG: South Africa's rand inched lower early on Wednesday, retreating from a one-week high hit overnight as caution set in ahead of domestic consumer inflation figures.

The rand was 0.02% weaker at 13.9900 per dollar by 0630 GMT, having rallied to 13.9700 before rand bulls balked again in the face of a key technical level below 13.90.

The currency has struggled to break through that level in the last two weeks.

The country's inflation release, due at 0800 GMT, is expected to show a big year-on-year jump, moving closer to the mid-point of the central bank's target range and intensifying the case for a rate hike.

The South African Reserve Bank (SARB) will decide on lending rates on Thursday, with polls overwhelmingly predicting another hold, but with a hawkish tilt.

Inflation is expected to accelerate to 4.3% from 3.2% in March, against a lending rate of 3.5%, meaning South Africa will run a negative real rate, a situation the central bank has typically not tolerated for extended periods.

It also risks turning off investors seeking high returns.

Bonds were flat, with the yield on the benchmark government issue due in 2030 steady at 9.075%.