Description:
The South African rand gained in early trade on Friday, as markets focused on a key U.S. inflation reading that could offer more cues on the Federal Reserve’s future interest rate path.
At 0730 GMT, the rand traded at 18.26 against the dollar , about 0.6% stronger than its previous close.
The U.S. personal consumption expenditure data for June – the Fed’s favoured measure of inflation – is due later on Friday and could give hints on the timing of interest rate cuts in the world’s biggest economy.
Data out of the U.S. on Thursday showed that the economy grew faster than expected in the second quarter, but inflation pressures subsided, leaving intact expectations of a September rate cut.
Like other risk-sensitive currencies, the rand often takes cues from global drivers such as U.S. economic data and monetary policy in addition to local factors.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI) was little changed in early trade.
South Africa’s benchmark 2030 government bond was slightly stronger in early deals, as the yield slipped 2.3 basis points to 9.452%.
Source: Reuters.com
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