South Africa’s rand recovered early on Thursday, after sliding the previous day as a surprisingly strong rise in U.S. consumer prices raised fears that the Federal Reserve would raise interest rates, weighing on risk appetite.
The rand traded at 14.0875 against the dollar as of 0624 GMT, 0.37% firmer than its previous close.
The rand, which hit a 16-month high on Tuesday, has had a strong run since March, prompted by lower rates in the developed world, a surge in global commodity prices and signs the local economy is on track for a better-than-expected recovery.
Data on Wednesday showed U.S. consumer prices increased the most in nearly 12 years in April, intensifying concerns over rising inflation and raising expectations that the central bank would tighten its monetary policy.
Higher U.S. interest rates dent the appeal for riskier but high-yielding currencies such as the rand.
Traders will now turn attention to U.S. weekly jobless claims due later on Thursday and retail sales numbers on Friday for guidance on whether upward pressure on prices will persist. read more
Locally, focus is on March mining production data due at 0930 GMT.
In fixed income, the yield on the government bond due in 2030 was flat at 9.075%.
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