Rand gains on Thursday

The rand was stronger in early trade on Thursday, before the release of US inflation data that will likely set the tone for global markets and local mining and manufacturing figures.

At 0645 GMT, the rand traded at 18.92 against the dollar, about 0.4% stronger than its previous close but still down more than 5% so far this month.

The dollar was last trading around 0.1% weaker against a basket of global currencies.

Rand/ dollar exchange rate 

“The rand continues to suffer wild waves, where it underperforms for weeks on end, and then similarly outperforms for weeks,” Rand Merchant Bank analysts said in a research note.

“Day-to-day movements have generally not been extreme, but the moves accumulate quickly: the past three months have seen ranges… usually only seen in crises,” they added.

The major global driver on Thursday is expected to be US Consumer Price Index (CPI) data at 1230 GMT which will probably influence the Federal Reserve’s interest rate path.

US headline consumer inflation is forecast to pick up slightly in July to an annual 3.3% from 3.0% in June, while the core rate, which excludes the volatile food and energy segments, is forecast to stay at 4.8% in annual terms.

Markets are pricing in a more than 50% chance that the Fed is done with interest rate hikes this year as inflation has moderated, but those bets could change depending on Thursday’s CPI figures.

On the local front Statistics South Africa will at 0930 GMT publish June mining production numbers, and at 1100 GMT manufacturing output for the same month.

South Africa’s benchmark 2030 government bond was little changed in early deals, the yield down 1 basis point to 10.205%.