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South African rand slightly weaker in early trade

Kitco News

JOHANNESBURG, July 22 (Reuters) - South Africa's rand slipped slightly early on Monday, as investors scaled back their expectations for deep U.S. interest rate cuts.


At 0653 GMT, the rand traded at 13.9575 versus the dollar, less than 0.1 percent weaker than its previous close.


Government bonds also dipped slightly, with the yield on the benchmark 2026 government bond 3 basis points higher at 8.050 percent.


In the absence of major local data releases, South African assets tend to take their cue from global factors.


Expectations that U.S. monetary policy will ease tapered off after a spokesman for the Federal Reserve clarified comments by a senior central banker last week.


Priced-in forecasts for a 50 basis point cut have tumbled from as high as 71% last week to 18.5% on Monday. South Africa-focused investors will look to local consumer and producer inflation data later in the week for clues about price pressures in Africa's most advanced economy.


On Tuesday, the finance ministry is expected to introduce an appropriation bill to parliament which will say how much financial support struggling state power firm Eskom will get this financial year and next.


(Reporting by Alexander Winning, editing by Louise Heavens)

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