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Johannesburg - The rand weakened against the dollar early on Wednesday but remained within the previous day's trading range as investors braced for inflation data and the Finance Minister's interim budget statement.
The rand was down 0.26% at R9.7750/$ at 08:47, off a R9.7500 close in New York on Tuesday.
The local currency managed a quick rally to a month high on Tuesday after softer-than-expected US jobs data signalled the Federal Reserve would probably stay put on its stimulus for the world's biggest economy.
It stayed within that range early on Wednesday, and dealers expect sideways trading until after consumer inflation data at 10:00, and the mini budget statement at 14:00, which is likely to put long-dated bonds under pressure.
Economists expect CPI to have slowed to 6 percent year-on-year in September, from 6.4% the previous month, because of lower fuel and food prices.
Such a drop would put the index back into the Reserve Bank's 3% to 6% target range, and would be likely to stimulate foreign flows into the bond market, boosting the currency.
Later in the session, bond investors will be focused on Finance Minister Pravin Gordhan's mini budget, an update of the main budget presented in February.
Gordhan is expected to trim economic growth and revenue collection targets, while raising borrowing.
The market will also be keen to see if, and by how much, Gordhan aligns his budget with the National Development Plan, a long-term blueprint for boosting economic growth that has been heavily criticised by unions and the political left.
The ruling ANC faces an election in 2014, but analysts say it is unlikely to push the timeline for fiscal consolidation too far out for fear of inducing credit ratings downgrades.
Yields on government bonds were up half a basis point to 7.71% on the benchmark 2026 issue and 5.72% on the 2015 note.
Treasury will announce issuance plans for next week at 11:00, with Eskom's auction results following after that.
The rand was down 0.26% at R9.7750/$ at 08:47, off a R9.7500 close in New York on Tuesday.
The local currency managed a quick rally to a month high on Tuesday after softer-than-expected US jobs data signalled the Federal Reserve would probably stay put on its stimulus for the world's biggest economy.
It stayed within that range early on Wednesday, and dealers expect sideways trading until after consumer inflation data at 10:00, and the mini budget statement at 14:00, which is likely to put long-dated bonds under pressure.
Economists expect CPI to have slowed to 6 percent year-on-year in September, from 6.4% the previous month, because of lower fuel and food prices.
Such a drop would put the index back into the Reserve Bank's 3% to 6% target range, and would be likely to stimulate foreign flows into the bond market, boosting the currency.
Later in the session, bond investors will be focused on Finance Minister Pravin Gordhan's mini budget, an update of the main budget presented in February.
Gordhan is expected to trim economic growth and revenue collection targets, while raising borrowing.
The market will also be keen to see if, and by how much, Gordhan aligns his budget with the National Development Plan, a long-term blueprint for boosting economic growth that has been heavily criticised by unions and the political left.
The ruling ANC faces an election in 2014, but analysts say it is unlikely to push the timeline for fiscal consolidation too far out for fear of inducing credit ratings downgrades.
Yields on government bonds were up half a basis point to 7.71% on the benchmark 2026 issue and 5.72% on the 2015 note.
Treasury will announce issuance plans for next week at 11:00, with Eskom's auction results following after that.
