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South African rand dips before CPI data

South African rand dips before CPI data

South Africa’s rand dipped early on Wednesday, erasing some of the previous day’s gains before consumer price index (CPI) data.

At 0720 GMT, the rand ZAR=D3 traded at 15.2375 versus the dollar, roughly 0.3% weaker than its previous close.

The rand had risen on Tuesday as appetite for riskier assets grew after U.S. President Donald Trump accepted the start of a transition to a Joe Biden presidency. ZACPIY=ECI data is due around 0800 GMT and is expected to show a slight pickup in consumer inflation in October to 3.1% in annual terms, from 3.0% in the previous month.

Those modest readings are comfortable for the central bank, which has a target range of between 3% and 6%.

The central bank kept its main lending rate on hold last week at 3.5% ZAREPO=ECI , and one of its deputy governors said this week that a full economic recovery from the effects of COVID-19 was likely to be “slow and difficult”. bonds were little changed in early deals, with the yield on the 2030 instrument ZAR2030= at 8.855%.

Source: Reuters

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