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Johannesburg - The rand pulled back from the previous session's four-week highs against the dollar on Wednesday and traders said South African GDP data expected to show a small contraction in the first quarter could add pressure on the currency.
The rand has gained as much as 5% against the dollar since Friday, reaching R14.7995/$ on Tuesday in a relief rally prompted by S&P's decision to maintain the investment grade BBB- rating.
READ: All eyes on GDP and ratings agency Fitch
The currency however gave back some of those gains on Wednesday to trade at R14.9175/$ by 08:50, down 0.1% from the previous session's close.
Traders saw a risk to the currency from Statistics South Africa's GDP data due out at 11:30, with economists polled by Reuters expecting the economy to have shrunk 0.1% on a quarter-on-quarter annualised basis in the first three months of the year.
"If this is indeed the case there is not much chance the rand will be able to continue its journey lower (firmer)," Standard Bank trader Warrick Butler said in a note to clients.
Another rand-moving headline could be a review from Fitch, which is also expected to retain its own BBB- rating on Africa's most industrialised economy, although it could change the outlook to negative from stable.
READ: All eyes on GDP and ratings agency Fitch
Fitch has not set a date for its announcement, but the Treasury has said it expects it on June 8.
In fixed income on Wednesday, the yield on debt maturing in 2026 was flat at 9.1%.
The JSE securities exchange's Top-40 futures index was down 0.4%, pointing to a slightly weak start for the local bourse at 09:00.
