South African Rand Slips Ahead of Inflation Data as Stocks and Bonds Weaken
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South Africa’s rand weakened on Friday as markets looked ahead to an inflation reading due next week for clues on the health of Africa’s most industrialised economy and on the central bank’s room to cut interest rates further this year.
At 1319 GMT, the rand traded at 16.4050 to the dollar, down about 0.4% from Thursday’s close, as investors stayed cautious ahead of December consumer inflation figures.
Inflation slowed in November for the first time in three months to 3.5%, remaining within the tolerance band around the central bank’s 3% target, and policymakers have already begun easing after cutting the main lending rate by 25 basis points to 6.75% at their last meeting.
Global drivers also stayed in focus, with the dollar flat against a basket of major currencies as investors tracked comments from U.S. President Donald Trump on Iran and on Federal Reserve Chair Jerome Powell, a backdrop that often influences risk-sensitive currencies such as the rand.
South African assets weakened alongside the currency, with the Johannesburg Stock Exchange’s Top-40 index down 0.9% and the benchmark 2035 government bond softer, pushing its yield up 7.5 basis points to 8.36%.
