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Johannesburg - The rand edged up against the dollar on Wednesday ahead of data expected to show a rise in inflation, which would increase the chances of higher interest rates before the end of the year.
Government bonds, which have seen a sell-off by foreigners since the start of the year, were weaker, pushing yields higher in tandem.
The yields on the benchmark 2015 bond R157 and the longer-dated 2026 note R186 each added two basis points to 7.83% and 8.675% respectively.
The rand traded 0.41% firmer at R7.33 against the dollar by 06:43 GMT after ending Tuesday's session in New York at R7.3450, close to a near 6-month low touched last week.
The rand has fallen 10% since the start of this year, almost wiping out gains of around 12% last year that triggered concerns about the viability of the manufacturing sector, which contributes 16% to South Africa's GDP.
Market players say the South African Reserve Bank (Sarb) has been buying more foreign currency than usual this year in an attempt to keep rand appreciation at bay.
"The local unit looks to be cemented to R7.30/dollar and, unlike its compatriot emerging market and commodity currencies, is rather unresponsive to global happenings of late," RMB said in a note.
"This is perhaps a reflection of a heavier hand by the Sarb. Although the central bank is rumoured to have lessened the extent of their purchases this month, the risk of greater intervention looms, keeping dollar/rand at bay."
Government bonds, which have seen a sell-off by foreigners since the start of the year, were weaker, pushing yields higher in tandem.
The yields on the benchmark 2015 bond R157 and the longer-dated 2026 note R186 each added two basis points to 7.83% and 8.675% respectively.
The rand traded 0.41% firmer at R7.33 against the dollar by 06:43 GMT after ending Tuesday's session in New York at R7.3450, close to a near 6-month low touched last week.
The rand has fallen 10% since the start of this year, almost wiping out gains of around 12% last year that triggered concerns about the viability of the manufacturing sector, which contributes 16% to South Africa's GDP.
Market players say the South African Reserve Bank (Sarb) has been buying more foreign currency than usual this year in an attempt to keep rand appreciation at bay.
"The local unit looks to be cemented to R7.30/dollar and, unlike its compatriot emerging market and commodity currencies, is rather unresponsive to global happenings of late," RMB said in a note.
"This is perhaps a reflection of a heavier hand by the Sarb. Although the central bank is rumoured to have lessened the extent of their purchases this month, the risk of greater intervention looms, keeping dollar/rand at bay."
