JOHANNESBURG, Sept 13 (Reuters) – South Africa’s rand began the week on a weaker footing, as investors awaited readings on U.S. consumer prices that could be crucial to the Federal Reserve’s decision on when to exit its super-supportive policy.
At 0630 GMT, the rand traded at 14.2400 against the dollar, 0.3% weaker than its previous close.
“We have started the new week on the back foot … This move has not been unexpected as the rand had run quite hard and was due a correction in the short term,” said TreasuryONE currency strategist Andre Cilliers.
“Tomorrow’s U.S. CPI data will be the next closely watched number for clues to the dollar’s direction.”
All eyes are now on U.S. consumer price index for August, due to be released on Tuesday, along with U.S. retail sales and production figures later in the week as they frame the world largest economy’s progress in the lead-up to the Federal Reserve’s Sept. 21-22 meeting.
Riskier currencies, such as the rand, thrive on U.S. interest rates remaining low because they benefit from the interest rate differential that increases their appeal for so-called carry trade, in which investors borrow in a low-yielding currency to invest in higher-yielding assets.
In fixed income, the yield on the benchmark 2030 government bond was up 1.5 basis points to 8.870%. (Reporting by Olivia Kumwenda-Mtambo; Editing by Edmund Blair)