South Africa’s rand falls ahead of U.S. inflation data release

 The South African rand retreated against the dollar on Wednesday, in cautious trade ahead of the much-awaited U.S. consumer price data due later in the day.

At 0611 GMT, the rand ZAR=D3 traded at 14.0400 against the dollar, 0.29% weaker than its previous close.

The rand moved below 14 to the dollar for the first time since early January 2020 on Monday and strengthened on Tuesday helped by stronger-than-expected manufacturing figures, strong prices for metals the country exports and signs that reform-minded President Cyril Ramaphosa was asserting his authority in the governing party.

The U.S. consumer price data due at 1230 GMT is keenly awaited by market participants to gauge inflationary pressure.

Despite various U.S. Federal Reserve officials reiterating a firmly dovish policy stance, investors are worried that higher inflation from a spike in commodity prices could force the Fed to raise interest rates.

Higher U.S. interest rates dent the appeal for riskier but high-yielding currencies like the rand. – reuters.com