Rand stronger as dollar slips before US inflation data

The South African rand was stronger early on Friday, as the dollar slipped before closely watched US inflation data that could influence the Federal Reserve’s policy tightening path.

At 0643 GMT, the rand traded at R15.41 against the dollar, around 0.68% higher than its previous close.

The dollar index , which measures the greenback against six peers, was down around 0.1%.

The US May consumer price index (CPI) is expected to cool a fraction, an outcome which could give the Fed some wiggle room to raise rates less aggressively later in the year.

Higher rates in the United States tend to drain capital from emerging markets like South Africa.

Stocks were set to open lower at 0700 GMT, with the JSE securities exchange’s Top-40 futures index down around 0.5%.

The government’s benchmark 2030 bond was weaker in early deals, with the yield rising 9.5 basis points to 10.075%.

Source: moneyweb.co.za