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Johannesburg - The rand steadied on Wednesday, recovering from six-week lows earlier in the week as the dollar lost some of its lustre and while investors awaited domestic inflation data and the minutes from the latest US Federal Reserve meeting.
At 08:30 the rand was at R10.1650/$, not far off its close in New York on Tuesday.
Investors are awaiting the release of the minutes at 18:00 for clues into the US central bank's policy outlook and whether the world's biggest economy will begin tapering off its quantitative easing (QE) programme of massive asset purchases.
"The focus is on the (Federal Reserve minutes) release this evening, but for South Africa investors the July CPI release is equally important for domestic policy. However, the impact on the rand will be limited compared to the influence that broader Fed QE tapering sentiment will have on the currency," said Christopher Shiells of Informa Global Markets.
Dealers said the rand had been oversold in recent sessions, and was due for a correction, however domestic labour concerns could also help keep it under pressure.
"We expect that dollar/rand will remain well supported above R10.100, even with a strong CPI print, as a number of risks, both external and domestic could see the pair spike," Shiells added.
Car manufacturing workers began a strike for higher wages on Monday, while miners continue with tough wage negotiations.
Investors will be keen to see if July consumer price inflation breached the central bank's 3% to 6% target in July.
The data is due at 10:00 and economists polled by Reuters said they expect inflation to accelerate to 6.2% year-on-year from 5.5% in June.
Yields on South African government bonds were up two basis points to 8.555% on the 2026 issue.
Treasury will announce issuance plans for next week at 11:00.
At 08:30 the rand was at R10.1650/$, not far off its close in New York on Tuesday.
Investors are awaiting the release of the minutes at 18:00 for clues into the US central bank's policy outlook and whether the world's biggest economy will begin tapering off its quantitative easing (QE) programme of massive asset purchases.
"The focus is on the (Federal Reserve minutes) release this evening, but for South Africa investors the July CPI release is equally important for domestic policy. However, the impact on the rand will be limited compared to the influence that broader Fed QE tapering sentiment will have on the currency," said Christopher Shiells of Informa Global Markets.
Dealers said the rand had been oversold in recent sessions, and was due for a correction, however domestic labour concerns could also help keep it under pressure.
"We expect that dollar/rand will remain well supported above R10.100, even with a strong CPI print, as a number of risks, both external and domestic could see the pair spike," Shiells added.
Car manufacturing workers began a strike for higher wages on Monday, while miners continue with tough wage negotiations.
Investors will be keen to see if July consumer price inflation breached the central bank's 3% to 6% target in July.
The data is due at 10:00 and economists polled by Reuters said they expect inflation to accelerate to 6.2% year-on-year from 5.5% in June.
Yields on South African government bonds were up two basis points to 8.555% on the 2026 issue.
Treasury will announce issuance plans for next week at 11:00.
