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Rand, bonds hold steady ahead of data

Johannesburg -  The rand steadied against the dollar early on Wednesday, with investors wary of taking strong positions before inflation data and the Federal Reserve's interest rate meeting.

The rand tracked the sideways move on euro/dollar to trade at R10.7455 to the dollar by 06:33 GMT, little changed from Tuesday's close in New York at R10.7395.

South Africa is releasing keenly awaited February consumer inflation data at 08:00 GMT, which will give clues about interest rates ahead of the Reserve Bank's three-day monetary policy meeting next week.

The Reserve Bank will announce its repo rate decision on March 27. Traders have moderated their views of steep policy tightening after governor Gill Marcus said last week expectations were overdone.

Economists polled by Reuters expect inflation to have quickened in February to 5.9% year-on-year (y/y), as price pressures from a weaker rand push the consumer price index (CPI) to the top of the central bank's 3-6% target band.

Government bond yields, slightly higher at 8.61% on the benchmark 2026 issue, are likely to rise further if CPI comes in higher than expected.

Statistics South Africa will also release retail sales data for January in the session. The market expects sales growth to have slowed to 2.9% y/y, from 3.5% in December as consumers battle with high levels of debt and tighter lending.

Retails sales numbers are due at 11:00 GMT.

However, the local market has been tracking global markets in the last few weeks and the Federal Reserve announces its decision on interest rates later on Wednesday, which could blunt the impact of local data.
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18.88
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23.85
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