The South African Rand traded near a fresh one-month high against the US Dollar on Wednesday, after data showed South Africa’s annual inflation rate had accelerated for a second straight month in September.
South African CPI inflation stood at 5.4% in September, up from 4.8% in August, while exceeding market expectations of 5.3%. Still, annual inflation remained within the South African Reserve Bank’s target range of 3% to 6%.
In September, the main upward pressure came from cost of transportation (up 4.2% YoY versus a 0.8% drop in August).
The country’s annual core inflation, which excludes prices of food, non-alcoholic beverages, fuel and energy, decelerated to 4.5% in September from 4.8% in August to mark its lowest level in 13 months.
Meanwhile, the US Dollar Index was little changed at 106.165, with the greenback struggling to appreciate against a basket of major peers, which some analysts attributed to a possible loss of momentum.
The Dollar Index has advanced almost 7% since July 13th.
“It’s had a really good run and it’s stalled a bit,” Westpac analyst Imre Speizer was quoted as saying by Reuters.
“Maybe it’s hitting the limits of this stage of the rally, and needs a bit of a correction.”
As of 8:34 GMT on Wednesday USD/ZAR was edging down 0.19% on the day to trade at 18.7491. Earlier in the session, the exotic Forex pair went down as low as 18.6906. The latter has been the pair’s weakest level since September 20th (18.6781).
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