JOHANNESBURG, Jan 21 – The South African rand edged higher in early Wednesday trading as investors positioned ahead of key domestic data releases expected to provide fresh signals on inflation trends and consumer demand.
The currency traded at 16.39 against the dollar by 0624 GMT, about 0.2% stronger than its previous close. Market attention is focused on December consumer inflation figures due later in the morning, alongside November retail sales data.
Nedbank economists share a similar view, attributing the expected increase primarily to higher fuel prices. Petrol prices rose by about 1.4% during the month, narrowing the year on year decline in fuel costs.
Food inflation is expected to provide some offset. Nedbank said softer cereal and other food prices are likely to ease food inflation marginally to 4.3%, despite continued pressure from higher meat prices linked to foot and mouth disease.
Retail sales data is also in focus as analysts assess the strength of consumer spending. Nedbank forecasts a rise to 4.8% in November, driven by Black Friday promotions, while economists polled by Reuters expect a more modest increase, with sales growth easing to 2.5% from 2.9% in October.
In the bond market, South Africa’s benchmark 2035 government bond strengthened in early deals, with the yield falling 1.5 basis points to 8.43%.
