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Rand softer ahead of retail data

Johannesburg - The rand snapped a four-day winning streak against the dollar on Wednesday and traders said a weaker than expected retail sales report could drag the currency lower.

The sales data, due out at 13:00, could help restrain the South African Reserve Bank from raising interest rates next week, further undermining the rand's high-yield advantage as investors brace for policy tightening in the United States.

By 09:00 the local currency was down 0.23% at R12.3505/$ compared with where it ended the New York session on Tuesday.

Government bonds were slightly firmer, with the yield on the 2026 benchmark dipping 2 basis points to 8.145%.

The rand had been on a firmer footing in the previous four trading sessions, helped by optimism over a bailout package for debt stricken Greece and a nuclear deal between Iran and major world powers.

Traders and analysts however expected renewed pressure as some of the euphoria wore off, with investors turning to Federal Reserve chair Janet Yellen's testimony before Congress for fresh pointers on the timing of US rate hikes.

Expectations that rates will soon go up in the world's biggest economy this year have whittled appetite for riskier emerging currencies like the rand, helping push it nearly 7% weaker against the dollar this year.

"Risks are high given Yellen’s key testimony this afternoon, the need for Greece to pass measures in parliament by midnight, and the renewed fall in Chinese equities," Rand Merchant Bank currency analyst John Cairns said in a note.

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Rand - Dollar
19.00
-0.5%
Rand - Pound
23.95
-0.2%
Rand - Euro
20.50
-0.2%
Rand - Aus dollar
12.35
+0.0%
Rand - Yen
0.13
-0.5%
Platinum
895.30
-0.2%
Palladium
991.47
-1.0%
Gold
2,193.25
-0.1%
Silver
24.44
-0.8%
Brent Crude
86.09
-0.2%
Top 40
67,836
+0.2%
All Share
74,046
+0.2%
Resource 10
56,127
+0.8%
Industrial 25
103,468
+0.2%
Financial 15
16,484
-0.2%
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