JOHANNESBURG (Reuters) – South Africa’s rand slid in early trade on Thursday against a buoyant dollar, slowly unwinding a rally that had sent the currency up more than 2% on Tuesday.
At 0632 GMT, the rand traded at 18.2200 against the dollar, about 0.1% weaker than its previous close.
The dollar was up around 0.1% against a basket of global currencies.
The rand leapt on Tuesday after softer-than-expected U.S. consumer inflation data boosted expectations that the Federal Reserve might be done with interest rate hikes.
But the South African currency struggled to firm on Wednesday despite better-than-expected local retail sales data.
“With limited key U.S. data until the end of the month, the risk is that we just repeat the pattern seen after the good payrolls figure: global markets, and so the ZAR, slowly unwind the rally,” Rand Merchant Bank analysts said in a morning briefing.
Like other risk-sensitive currencies, the rand often takes its cues from global factors such as U.S. economic data.
Andre Cilliers, currency strategist at TreasuryONE, said in a note he expected to see some consolidation and profit-taking given the scale and pace of the rand’s strengthening.
South Africa’s benchmark 2030 government bond was stronger in early deals, with the yield down 1.5 basis points to 10.190%.
(Reporting by Tannur Anders; Editing by Anait Miridzhanian, Bernadette Baum and Jan Harvey)
