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South African rand opens flat before PPI data

South African rand opens flat before PPI data

2020-11-26 

The South African rand opened flat on Thursday, before producer price inflation (PPI) data that will give more clues on price pressures in Africa’s most industrialised economy.

The rand ZAR=D3 was trading at 15.1200 versus the dollar at 0655 GMT, barely changed from its previous close.

October PPI figures ZAPPIY=ECI will be released around 0930 GMT and the index is expected to stay at 2.5%.

On Wednesday data showed the consumer price index rose quicker than expected in October to 3.3% ZACPIY=ECI . ZAPPIY=ECI has been modest this year, dropping below the central bank’s 3-6% target range during a hard coronavirus lockdown that led to a steep economic contraction.

Analysts at Capital Economics predicted on Wednesday that subdued price rises and a weak recovery would mean monetary conditions would be kept loose until at least the end of 2022.

Government bonds were stronger in early deals on Thursday, with the yield on the 2030 instrument ZAR2030= falling 7 basis points to 8.8%.

Source: Reuters

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