South African rand starts week stronger with inflation data in focus

Business Recorder reported that the South African rand gained ground on the greenback during early Monday trade. At 0645 GMT the currency stood at 16.1425 per dollar, roughly 0.4% stronger than its previous close. Market participants were focused on July inflation data that Statistics South Africa will publish on Wednesday.

Headline inflation hit a two-year high of 5.0% in June, up from 4.5% in May, mainly because of higher transport costs. Analysts polled by Reuters expect the July reading to cool to 4.5%. Nedbank economists, by contrast, see it easing to 4.3% as lower fuel prices reduce transport expenses.

The US dollar softened against a basket of major currencies on Monday, and gold moved up after softer than expected American data reduced bets on a rate increase next month. The 2035 government bond yield dipped half a basis point to 8.425%, leaving the bond largely unchanged in early dealings.