Rand drifts slightly weaker
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The South African currency softened a touch despite ongoing global risk-on sentiment as traders awaited the local CPI release according to NKC Research.
The local unit erased earlier session gains as inflation rose by a tepid 3.3 percent year-on-year – beating analyst expectations but remaining firmly at the lower end of the 3 percent - 6 percent target band. This signalled to traders that the prospect of short-term interest rate cuts still remains on the cards.
Turning to business confidence, the BER/RMB confidence index rose to 40 in Q4 from 24 last quarter (in Q2, the index plunged to five pts) as the retail trade, wholesale trade, manufacturing and building sub-indices all advanced.
Dampening expectations for a swift growth recovery, RMB noted that “although the surge in business confidence is encouraging, it only signifies an economy that's out of intensive care, and not out of high care.”
At the close of local trade, the rand quoted 0.46 percent weaker at R15.26/$, after trading in range of R15.13/$ - R15.29/$. The rand traded remained on the front foot overnight.
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