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Rand ticks higher on PPI data

Johannesburg - The rand edged up against the dollar on Thursday, and a quickening in producer price inflation pointed to interest rates rising more this year, adding to positive sentiment on the currency.

The rand hit a session high of R10.3840/$ and was at R10.4000/$ by 15:34 GMT, gaining 0.57% from Wednesday's close.

"The continued slide in core market yields has helped lend support to riskier emerging market currencies at the margin, seeing dollar-rand slide back under 10.5000," Tradition Analytics said in a note.

The rand ticked higher after Statistics South Africa reported that headline producer inflation accelerated more than expected to 8.8% year-on-year in April from 8.2% in March.

The rand remains vulnerable to South African trade data due out on Friday, however, with analysts polled by Reuters seeing a wider deficit for April.

This would point to continued pressure on the current account, a long-standing source of weakness for the rand during episodes of global risk aversion.

"The large number of public holidays in April ... along with further evidence of pressure on precious metal exports, thanks to the strike in the platinum sector, suggest another double-digit trade gap in the order of R12bn cannot be ruled out," BNP Paribas Cadiz Securities analyst Jeffrey Schultz said.

"This could put renewed pressure on the rand."

Government bonds rallied in tandem with the currency, pulling yields for the heavily traded 2026 and 2015 issues each 7 basis points lower to 8.185% and 6.565% respectively.

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Rand - Dollar
19.00
-0.5%
Rand - Pound
23.95
-0.3%
Rand - Euro
20.51
-0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.5%
Platinum
895.30
-0.2%
Palladium
991.47
-1.0%
Gold
2,196.11
+0.1%
Silver
24.46
-0.8%
Brent Crude
86.09
-0.2%
Top 40
67,818
+0.2%
All Share
74,028
+0.2%
Resource 10
56,225
+1.0%
Industrial 25
103,464
+0.2%
Financial 15
16,455
-0.4%
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