The rand firmed early on Wednesday as the dollar eased ahead of US consumer price data that could provide more clues on when the Federal Reserve would taper stimulus and raise interest rates.
At 0648 GMT, the rand traded at 14.9300 against the dollar, 0.33 percent firmer than its previous close.
“All eyes are on the US inflation report today. Statements by three Fed officials on Tuesday indicated the US economy has recovered sufficiently to start the tapering of asset purchases in November,” said Bianca Botes, director at Citadel Global.
“Meanwhile, soaring energy prices continue to cause inflation concerns across the globe.”
In the so-called “taper tantrum” of 2013, a Fed announcement that it would begin cutting back on bond purchases led to a sharp sell-off in emerging market currencies such as the rand.
Higher rates in developed countries often drain capital away from higher-yielding but riskier emerging markets such as South Africa, weighing on their currencies.
The domestic focus is on August retail sales figures due at 1100 GMT for insights on the health of the economy in the third quarter.
South Africa’s August manufacturing output rose 1.8 percent year-on-year, while mining production grew 2 percent in annual terms the same month. Manufacturing surprised to the upside, while mining came in weaker than expected, reinforcing the view that the economic recovery from the pandemic has been uneven across sectors.
Government bonds also firmed, with the yield on the 2030 maturity down 5 basis points to 9.490 percent.