South Africa's rand dipped in early trade on Wednesday, consolidating after recent gains and on the euro's weakness, despite a higher gold price that, along with rising world stocks, should lift domestic shares.
Government bonds also gained ahead of consumer inflation data to be released at 9am SA time, with economists foreseeing an easing in inflation back into the central bank's 3-6 percent target range.
The euro, the currency of a key South African trading partner that the rand often tracks, hit a 10-month low against the dollar as investors remained sceptical about a quick solution for Greece's fiscal woes.
Asian stocks, though, tracked Wall Street's rally overnight to push toward two-month highs and gold extended recent gains on bargain hunting, moves likely to support Johannesburg's bourse.
South Africa's blue chip Top-40 June futures contract was 0.7 percent higher at 08:35 SA time, ahead of the market open at 09am SA time.
The rand was trading at 7.35 to the dollar, 0.3 percent softer than its previous close in New York. It was about 0.1 percent stronger against the euro at 9.85.
Analysts said the local currency remained resilient, bolstered by improving domestic economic conditions, including a surprising fall in the current account deficit in the fourth quarter, and strong portfolio inflows.
"The potential for more rand strength should not be underestimated, particularly if global equity markets extend their rally," said George Glynos, managing director of market analysts ETM, predicting a 7.28 to 7.40 range for the session.
The bond market will watch for local inflation numbers, with data having surprised on the downside over the past few months and some investors holding out for an interest rate cut on Thursday.
Analysts are expecting inflation to cool to 5.7 percent year-on-year in February from 6.2 percent and a faster-than-expected slowing may help extend a recent bond rally, adding to the small chance of a rate cut.
The yield on the 2015 bond was down 1 basis points for the session at 8.105 percent while the 2036 yield was 2 basis points lower at 8.805 percent. - Reuters
