Rand extends gains ahead of inflation data

The rand extended gains in early trade on Wednesday, ahead of inflation data that could hint at the country’s future interest rate path.

At 0610 GMT, the rand traded at R18.74 to the US dollar.

The dollar last traded about 0.1% weaker against a basket of global currencies.

The rand had gained as much as 1% on Tuesday as risk appetite returned to global markets due to falling US Treasury yields.

Statistics South Africa will release the country’s July inflation figures at 0800 GMT.

Analysts polled by Reuters predict July inflation will slow to 5.0% from 5.4% in June. The South African Reserve Bank (Sarb) targets a range of 3-6%.

The figures will likely inform the Sarb’s interest rate decision when it meets in September.

South Africa is hosting leaders from Brazil, India and China in Johannesburg for the second day of the Brics summit of emerging economies on Wednesday, where the expansion of the bloc will likely be the topic of discussion.

Russian President Vladimir Putin is joining virtually.

South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 3 basis points to 10.445%.