JOHANNESBURG (Reuters) -The South African rand edged lower on Monday, with the main focus this week on domestic inflation numbers, while investors also eyed geopolitical developments which could influence the risk-sensitive local currency.
Statistics South Africa will release July inflation data on Wednesday, with analysts polled by Reuters expecting a rise to 3.5% year-on-year from 3.0% in June.
At 1430 GMT the rand traded at 17.6450 against the dollar, roughly down 0.4% on Friday’s close.
The greenback last traded 0.2% stronger against a basket of currencies.
The local unit will also take cues from geopolitical events as traders kept a keen eye on U.S. President Donald Trump’s meeting with Ukrainian and European leaders, and the Federal Reserve’s annual symposium in Jackson Hole.
“Most investors should anticipate a consolidative USD-ZAR that will take its direction from developments abroad,” ETM Analytics said in a research note.
“Domestic considerations will feature more prominently if the domestic inflation reading surprises strongly to the topside.”
Inflation in the Southern African country rose to 3.0% in June from 2.8% in May, reaching the base of the central bank’s target range.
On the stock market, the Johannesburg Stock Exchange’s Top-40 index was last down 0.7%.
South Africa’s benchmark 2035 government bond was also weaker, as the yield rose 5 basis points to 9.635%.
(Reporting by Sfundo Parakozov and Anathi Madubela;Editing by Gareth Jones, William Maclean)
