South African rand firms against dollar ahead of July inflation data
By Aboki Forex —
The South African rand strengthened against the U.S. dollar in early trade on Monday, as investors waited for July inflation figures due later this week.
At 0645 GMT, the rand traded at 16.1425 per dollar, up about 0.4% from its previous close.
Inflation data in focus
Statistics South Africa will release July consumer inflation data on Wednesday. Analysts polled by Reuters expect a cooling reading of 4.5%.
Headline inflation accelerated to a two-year high of 5.0% in June, up from 4.5% in May, driven mainly by transport costs.
Economists at Nedbank said they expect inflation to slow to 4.3%, citing lower transport costs resulting from a decline in fuel prices.
Global factors support rand
The U.S. dollar weakened against a basket of major currencies on Monday, while gold prices edged higher. Softer-than-expected U.S. economic data has dampened expectations of a U.S. interest rate increase next month.
South Africa's benchmark 2035 government bond was little changed in early deals, with the yield falling half a basis point to 8.425%.
For Nigerian businesses tracking emerging market sentiment, a firmer rand and weaker dollar could ease some pressure on African currencies, but much depends on the inflation numbers and global risk appetite in the days ahead.