Johannesburg - South Africa's rand edged weaker against the dollar on Thursday after climbing to a two-month high the previous session, propelled by inflation data that came in below market forecasts.
The rand slipped 0.29 percent to 10.5400 to the dollar by 08:05 SA time, down from its New York close of 10.5100 after a run that saw the currency breach the 10.5 support level for the first time since the last week of May.
Domestic consumer inflation registered 6.6 percent year-on-year in June, the same as May, defying market expectations it would quicken to 6.7 percent.
The rand sprinted ahead of its emerging market peers as it coupled the steady inflation numbers - though still outside the central bank's target range - with positive sentiment and money flowing out of conflict-gripped eastern Europe.
“Turmoil in Ukraine and subsequent sanction threats against Moscow have prompted investors to move funds out of Russia and into other high-yielding markets,” Christie Viljoen, an economist at NKC Independent Economists, said in a market note.
“In fact, the rand was the biggest advancer among 24 developing nation peers over last five day.”
Hopes of a resolution to a three-week work-stoppage in the metals and engineering sector by over 200,000 workers have also stemmed rand aversion.
Yields on government bonds were unmoved, with the short paper due in 2015 remaining at 6.64 percent and the longer-dated 2026 on 8.115 percent. - Reuters