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JOHANNESBURG – South Africa’s rand backtracked on Tuesday, surrendering the previous session’s small gains in cautious trade as investors awaited key data release later in the week.
At 0730 GMT the rand was 0.49% weaker at 14.4600 per dollar from an overnight close of 14.3900 in New York, with upcoming consumer inflation data and a central bank decision on lending rates capping any large bets.
“Local incoming USD flows saw the rand trade marginally firmer on the day (on Monday). The markets await insights regarding (the appointment of new) Cabinet members and the outcome of the MPC on Thursday,” Nedbank analyst Reezwana Sumad said in a note.
A Reuters poll of economists and analysts conducted last week forecast the central bank will leave interest rates unchanged at 6.75%, with inflation expected to remain within the Reserve Bank’s 3-6% target range.
Statistics South Africa publishes April consumer figures on Wednesday at 0800 GMT.
“Internationally, the focus remains on the ongoing trade-war scenarios,” Sumad said.
Washington’s decision to ease some of its restrictions on Chinese telecoms giant Huawei late on Monday saw some demand trickle back into emerging markets, which may support the rand as the session wears on.
South African government bonds were weaker, with the benchmark 10-year issue adding 2 basis points to 8.52 percent. – Reuters Africa
Bongani Ndlovu