Rand softens, US inflation in focus

Johannesburg - The rand softened marginally against the dollar early on Friday ahead of US inflation data that is likely to put pressure on the local unit if it comes in stronger than expected.

At 08:43 the rand was trading 0.15% softer at R11.9750/$ compared to its overnight close of R11.9625 in New York.

"The rand faces heightened threats today from US data," Rand Merchant Bank strategist John Cairns said in a market note. "Having dipped below 11.96 yesterday on the back of a weak dollar, USD/ZAR is back at this level this morning."

Conversely, soft US inflation numbers would add to the perceptions of weakness in the world's biggest economy, possibly prompting the Federal Reserve to delay rate hikes, which in turn would boost the rand, Cairns added.

On the domestic front, power utility Eskom said it would implement rolling blackouts for the sixth consecutive day in an attempt to keep the electricity network stable.

Bond yields inched higher but could fall if US inflation data print comes out stronger than expectations.

Local government bonds were weaker, with the yield for the 2026 benchmark up 1 basis points to 7.785%.