JOHANNESBURG, Sep 13 (Reuters) – The South African rand started the week on a weaker basis as investors waited for US consumer price readings that could be crucial in the Federal Reserve’s decision to exit its super supportive policies .
At 0630 GMT, the rand was trading at 14.2400 against the dollar, 0.3% weaker than its previous close.
“We started the new week stepping backwards … This move was not unexpected as the rand had gone pretty hard and a correction was due in the short term,” said Andre Cilliers, TreasuryONE currency strategist.
“Tomorrow’s US CPI data will be the next closely watched number for any clues about the direction of the dollar.”
All eyes are now on the August US Consumer Price Index due to be released Tuesday, along with US retail sales and production numbers later in the week as they track the progress of the world’s largest economy in the lead-up to the Federal Reserve Act of Sept. 21.-22. Meeting.
Riskier currencies like the rand benefit from low US interest rates because they benefit from the interest rate differential, which makes them more attractive for the so-called carry trade, where investors borrow money in a currency with a lower yield to invest in higher-yielding assets.
For fixed income securities, the benchmark government bond yield rose 1.5 basis points to 8.870% in 2030.
Reporting by Olivia Kumwenda-Mtambo; Editing by Edmund Blair
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