South Africa’s rand firmed early on Friday but was on track for weekly losses as the US dollar rose and weak domestic economic data weighed on sentiment.
At 0610 GMT, the rand traded at 14.5700 against the dollar, 0.17% firmer than its previous close. However, the currency was set to make weekly losses of more than 2%.
After three weeks of strong gains, the rand has reversed direction since Tuesday, buffeted by poor domestic retail data, a retreat in commodity prices, and a recommendation from investment bank JPMorgan to sell the currency.
Markets focus is now on next week’s local consumer price index (CPI) data, South Africa’s central bank interest rates decision, and the Federal Reserve policy meeting for indications on how soon the US central bank will start to taper stimulus.
The South Africa Reserve Bank’s monetary policy committee will announce its rate decision on Sept. 23, with CPI data out the day before.
In the United States, the Federal Open Market Committee’s (FOMC) two-day policy meeting ending September 22 should provide some clarity on the outlook for both tapering and eventual interest rate hikes.
