JOHANNESBURG: The South African rand weakened in early trading on Tuesday, as investors looked towards June inflation data due out on Wednesday and markets watched for developments in the US presidential race.

At 0725 GMT, the rand traded at 18.38 against the dollar , about 0.75% weaker than its previous close.

“Market participants (are) sitting on the sidelines watching the US presidential race unfold and also local inflation data out tomorrow,” said Rand Merchant Bank analysts in a research note.

On Sunday, US President Joe Biden withdrew his bid for reelection in the November vote and endorsed Vice President Kamala Harris to face Republican Donald Trump.

Investors will turn to June inflation data due on Wednesday for hints on the future interest rate path of Africa’s most industrialised economy.

Monetary policy has remained tight as the central bank tries to steer inflation back towards the midpoint of its 3%-6% target range.

South African rand slips against the dollar

“Inflation is being forecast to print marginally softer at 5.1% for the month compared to May’s 5.2%,” Rand Merchant Bank analysts added.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index traded around 0.4% weaker in early trade.

South Africa’s benchmark 2030 government bond was weaker in early deals, as the yield gained 3.5 basis point to 9.6%.