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Johannesburg - The rand on Friday ended a recent rally after stronger-than-expected US inflation data lifted the dollar, while stocks were expected to open higher.
By 08:45 the rand had weakened 0.35% to R13.0945 per dollar, reversing gains in the previous session that saw the unit hit a seven-week high. The rand just failed to breach the key 13.00 resistance level on Thursday.
Government bonds were also weaker as yields inched up, with the benchmark paper due in 2026 adding 1.5 basis points to 8.155%.
The Top 40 futures index was up 0.72%, suggesting the blue-chip stocks index would open 322 points firmer.
"From a technical point of view today could be quite crucial," said Warrick Butler, a trader at Standard Bank. A close firmer than 13.1700 could open the door to a rally as far 12.50, Butler said.
The rand, however, faces a rough ride against the resilient dollar, which shrugged off tepid retail and producer price data earlier in the week to rebound from one-and-a-half month lows.
A surprise 0.2% rise in the September US core consumer price index pushed the year-on-year gain to 1.9%, closer to the Federal Reserve's 2% goal, backing the case for a 2015 rate hike.
Traders will be eyeing a raft of local releases, with inflation, retail sales and Finance Minister Nhlanhla Nene's medium-term budget speech before parliament all due next Wednesday.
