JOHANNESBURG: South Africa’s rand fell slightly early on Monday, as risk appetite was subdued ahead of a key U.S. inflation report later in the week.

At 0630 GMT, the rand traded at 18.7300 against the dollar, about 0.1% weaker than its previous close.

A reading on U.S. inflation due on Thursday is expected to provide some clarity on the Federal Reserve’s monetary policy outlook, which often determines direction for emerging market currencies like the rand.

Central bank data released on Monday showed that South Africa’s net foreign reserves rose to $56.900 billion at the end of December from $56.319 billion in November, while gross reserves increased to $62.518 billion in December from $61.721 billion the previous month.

Monthly manufacturing data due later this week will give further clues about the health of the local economy.

South Africa’s benchmark 2030 government bond was weaker in early deals, with the yield up 1 basis point to 9.875%.