Rand gains ahead of jobs and US inflation data

The  rand strengthened in early trade on Tuesday ahead of local unemployment figures and as markets await US inflation data, analysts said.

At 0655 GMT the rand traded at R18.70 against the dollar.

The dollar last traded about 0.03% stronger against a basket of global currencies.

Statistics South Africa is scheduled to release the country’s third-quarter unemployment data at 0930 GMT.

Later in the day investors will turn their attention to US consumer price index (CPI) figures for hints on the health of the world’s biggest economy.

“Markets (are) treading water ahead of US CPI … markets are in holding mode as caution sets in,” said TreasuryONE currency strategist Andre Cilliers.

The US inflation reading could give clues on the Federal Reserve’s future interest rate path after mixed messages in recent weeks.

“(It) all comes back to whether the Fed will pivot to a more dovish stance,” Rand Merchant Bank analysts said in a research note.

Like other risk-sensitive currencies, the rand often takes cues from global drivers such as US monetary policy as well as local data points.

South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 1 basis point at 10.405%.