South African rand slips against stronger dollar ahead of PPI

The South African rand weakened against a stronger dollar in early trade on Thursday ahead of the central bank’s quarterly bulletin and producer price index data later in the day.

At 0652 GMT, the rand traded at 18.7100 against the dollar , about 0.25% weaker than its previous close.

The dollar last traded at 103.120, almost 0.2% stronger, against a basket of global currencies.

The dollar made its strongest gains since early June after comments by Federal Reserve Chairman Jerome Powell on Wednesday alluded to further interest rate hikes to tackle inflation when the Fed meets in July and September.

Statistics South Africa will publish the country’s Producer Price Index (PPI) for May (ZAPPI=ECI), (ZAPPIY=ECI) at 0930 GMT.

Analysts polled by Reuters predict May PPI to come in at 7.3%, compared to 8.6% in April.

“Both final and intermediate producer price inflation has cooled off rapidly in recent months, and the trend is set to continue,” said ETM Analytics in a research note.

At 0800 GMT, the South African Reserve Bank will release its quarterly bulletin, showing foreign direct investment and portfolio investment flows for January to March 2023.

South Africa’s benchmark 2030 government bond was flat in early deals at 10.480%.

Source: Reuters