Rand stronger as dollar rally stalls
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THE rand opened slightly stronger on Monday as a rally in the dollar stalled following a surprise hawkish shift from the US Federal Reserve last week.
The rand lost more than 4 percent against the dollar last week as the Fed brought forward its projections for interest rate increases, prompting a sell-off in emerging-market currencies.
At 0647 GMT, the local currency traded at 14.3500 against the dollar, roughly 0.1 percent firmer than its previous close, as the dollar dipped against a basket of major currencies.
This week, South Africa-focused investors will look to the consumer and producer price indices for clues about inflationary pressures in Africa’s most industrialised economy.
The Consumer Price Index data will be released on Wednesday and the Producer Price Index figures on Thursday.
Economists polled by Reuters expect consumer inflation to rise to 5.2 percent year on year in May from 4.4 percent the previous month, which would be the first time the indicator has risen above the midpoint of the South African Reserve Bank’s target range since the Covid-19 pandemic reached South Africa.
Annual producer inflation is seen rising to 7.3 percent in May from 6.7 percent in April.
Government bonds were little changed early on Monday, with the yield on the 2030 bond up 1 basis point to 8.97 percent.