South African Rand falls ahead of inflation data this week – Markets

JOHANNESBURG: The South African rand was slightly weaker in early trade on Monday after gaining last week, ahead of the release of domestic inflation data on Wednesday that could provide clues to the country's future interest rate stance.

At 06:31 GMT, the rand was trading at 17.8775 against the dollar, about 0.1 percent lower than its close on Friday.

The dollar lost about 0.38 percent against a basket of global currencies.

Investors will look to South Africa's inflation figures for July on Wednesday for clues about the central bank's future interest rate stance.

“Investors will be watching the number closely to see whether inflation eases sufficiently for the central bank to start cutting interest rates in September,” analysts at Rand Merchant Bank said in a research note.

According to a Reuters poll, economists expect the central bank to cut interest rates on September 19 for the first time in more than two years.

This week, global markets are likely to focus on the release of minutes from a Federal Reserve meeting and central bankers' symposium in Jackson Hole, where Fed Chairman Jerome Powell is scheduled to speak.

South African Rand loses against the dollar

Like other risk-sensitive currencies, the Rand is often influenced not only by local factors but also by global factors, such as US monetary policy.

The South African benchmark 2030 government bond was slightly firmer in early trading, with the yield falling 2.5 basis points to 9.295%.