Money SA economy
The rand retained its firmer tone and is hovering just above the 7.30 per dollar level in early trade on Wednesday. The local unit continue to track the stronger euro.
At 08.40am local time the rand was bid at R7.33 to the dollar, R9.54 to the euro and R11.42 to the pound. The euro was bid at $1.3022 from $1.2988 overnight.
RMB analysts said in a morning report that when EUR/USD tested 1.30 for the first time a week ago the threat was that a break would generate a spike in EUR/ZAR through 10.00.
"As yesterday's trade made very clear, the threat a EUR/USD break is now risking a move in USD/ZAR through 7.30, while EUR/ZAR is left to languish at 9.50. This highlights the general better environment for the ZAR and the bias in the unit to move stronger."
The consumer inflation index - the measure used by the South African Reserve Bank (SARB) for its inflation target - is expected to have decreased slightly to 4.5% year-on-year (y/y) from 4.6% in May, according to a survey of leading economists by I-Net Bridge.
This figure would indicate the downward trend remains in place after the CPI edged below 6% in February after it had reached higher than 6% the previous two months. But the slower pace of disinflation also indicates a trough may be approaching.
Forecasts among the 10 economists ranged from 4.3% to 4.7%.
Dow Jones Newswires reported the euro is taking a breather after it hit an 11-week high of $1.3047 against the U.S. dollar in New York Tuesday.
