Rand firms 1% against the dollar on slightly upbeat inflation data
The rand held on to its gains against major global currencies on Wednesday afternoon, after some fairly good local economic news.
SA’s inflation rate in October came in at 5.1% (annualised), in line with the Trading Economics consensus forecast. Core inflation — which strips out volatile items such as food and fuel — was, however, slightly lower than expected, at 4.2%, compared with 4.3%.
The inflation print comes ahead of a Reserve Bank interest-rate decision on Thursday, with no clear consensus on what the Bank might do.
"Persistently low underlying inflationary pressures suggest that the Bank’s expectations of an increase in core inflation to a 4.8% average over the quarter are high,” said FNB chief economist Mamello Matikinca. "While our view is for a 25-basis-point increase, benign underlying inflation may delay a hike," she said.
Global focus remains on Brexit and the US-China trade war, although volatility in the oil price is also being eyed.
At 2pm, the rand was up 1.03% against the dollar at R13.9483, 0.76% against the euro at R15.9057, and 0.86% against the pound at R17.865. The euro was 0.27% firmer at $1.1403.