The rand edged higher in early trade on Friday as investors remained wary of Federal Reserve’s stance on how aggressively it might raise interest rates despite softer inflation numbers earlier in the week.
A string of Fed officials have warned investors against being optimistic following inflation data this week, with the latest being San Francisco Fed President Mary Daly, who said on Thursday that she is open to a bigger rate hike than a 50 basis point one if data warranted.
At 0646 GMT, the rand traded at R16.23 against the dollar, 0.15% stronger than its previous close.
Like most emerging market currencies, the rand is highly susceptible to major movements in the global markets, especially when there is a dearth of local economic data points.
The dollar index, which measures the currency against six rivals, recovered slightly and was last trading at 105.16.
The government’s benchmark 2030 bond was lower in early deals, with the yield up 7 basis points to 9.885%.