JOHANNESBURG: The South African rand was muted in early trade on Wednesday, as traders awaited inflation data, retail sales data and a business confidence index that will shed light on the country’s economic outlook.
At 0532 GMT the rand traded at 16.0125 against the dollar, little changed from its previous close of 16.0175.
Domestically-focused traders are waiting for January consumer inflation data due at 0800 GMT and November retail sales at 1100 GMT. Economists polled by Reuters expect annual inflation will come in at 3.4% for January, down from 3.6%.
Investec economist Lara Hodes said inflation is projected to have lifted by a modest 0.2% m/m in January, translating to 3.5% y/y.
“Fuel prices decreased in January, with the petrol price down -66c/litre.
Moreover, international food prices, which affect domestic prices through export/import parity decreased by -2.1% m/m in January,“ Hodes said in a research note.
Nedbank economists forecast CPI to remain unchanged at 3.6% in January citing upward pressure from food inflation, driven by elevated meat prices reflecting the continued impact of foot-and-mouth disease.
Then, for insight on private sector sentiment, the South African Chamber of Commerce and Industry will release its business confidence index at 0930 GMT.
South Africa’s benchmark 2035 government bond was also flat in early deals, with the yield at 7.195%.
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