Rand Strengthens Ahead of Crucial US Inflation Data

South Africa's rand strengthened on Friday as traders waited for US inflation data that could impact expectations of the Federal Reserve's next move.

The rand, trading at 16.16 per dollar, tends to follow cues from US interest-rate expectations, with higher rates pulling money back toward dollars and away from riskier emerging-market assets.

Earlier this week, US producer-price data pointed to sticky price pressures, helped by energy costs, while oil prices remained elevated due to supply-disruption concerns in Middle East shipping lanes.

In South Africa's markets, the JSE Top-40 index was slightly higher, but the government bond due in 2035 weakened, pushing its yield up to 8.76%, a sign investors were demanding more return to hold longer-term South African debt.