JOHANNESBURG: South Africa's rand edged higher in early trade on Wednesday, as a dollar rally cooled, and analysts predicted the country's central bank would raise interest rates next week.

At 0700 GMT, the rand traded at 15.5050 against the dollar, roughly 0.1% stronger than its previous close.

The rand had been dragged lower on Tuesday by rising US Treasury yields which supported the dollar.

But the dollar slipped back 0.1% against a basket of currencies as of Wednesday morning in Johannesburg.

South African rand slips as dollar edges higher

A Reuters poll predicted the South African Reserve Bank (SARB) would raise its main lending rate by another 25 basis points to 4.00% on Jan. 27 to combat rising inflation, which could support the rand.

At around 0800 GMT, the statistics agency will publish December inflation figures, which are expected to show a further rise to 5.7% year on year from 5.5% in November, approaching the top of the SARB's 3%-6% target range.

The government's benchmark 2030 bond was slightly weaker in early deals, with the yield rising 2.5 basis points to 9.485%.