The rand was slightly firmer just before midday‚ after the release of better-than-expected consumer inflation data for November.
Statistics SA reported that the consumer price index (CPI) eased to 4.6% in November from 4.8% in October. Inflation was generally expected to ease slightly‚ but surpassed the consensus 4.7%.
The rand was firmer ahead of the CPI announcement trading at R13.6447 to the dollar at 9.01am‚ and gained slightly after the release.
An uptick in inflation is negative for fixed-income assets such as bonds as it reduces their future returns. South African benchmark government bonds were steady‚ with the benchmark 10-year bonds bid at 9.29% from the previous day’s 9.26%
Markets now await the much-anticipated US interest-rate announcement later in the day‚ with investors focused more on what is expected to be a hawkish statement from the Federal Reserve members‚ and their forecast on future interest-rate increases.
Most emerging-market currencies were slightly firmer ahead of the Fed’s announcement. An interest-rate increase in the US could see capital flight away from emerging economies.
At 11.30am‚ the rand was at R13.6341 to the dollar from R13.6750‚ at R16.0196 to the euro from R16.0575‚ and at R18.210 to the pound from R18.2114.
The euro was at $1.1750 from $1.1742.
by Reitumetse Pitso -BusinessLIVE
