South African rand falls after sharp inflation spike

JOHANNESBURG (Reuters) -The South African rand fell on Wednesday after September headline consumer inflation rose sharply in Africa’s most industrialised economy.

At 1513 GMT, the rand traded at 19.0625 against the dollar, 1.4% weaker than its previous close.

The dollar last traded about 0.3% stronger against a basket of global currencies.

Local investor focus was on data released by Statistics South Africa, which showed September year-on-year inflation rose to 5.4% from 4.8% in August.

It was still within the South African Reserve Bank’s (SARB) target range of 3% to 6%, but above its desired midpoint of that range.

The rand could face pressure going forward should conflict between Israel and Hamas expand into a regional war, prompting a move to safe-haven currencies like the dollar, DailyFX analyst Warren Venketas said in a research note.

Separately, South African retail sales fell 0.5% year on year in August after declining by a revised 1.0% in July, statistics agency figures showed.

With no other major economic data points scheduled for the week in South Africa, the rand is set to take cues from other international factors such as the direction of U.S. monetary policy.

A host of U.S. Federal Reserve speakers are due to give comments on Wednesday, while Fed Chairman Jerome Powell is also scheduled to speak on Thursday.

Shares on the Johannesburg Stock Exchange closed lower, with the blue-chip Top-40 index down over 1.2%.

South Africa’s benchmark 2030 government bond was weaker, with the yield up 6.5 basis points at 10.825%.

(Reporting by Tannur Anders and Bhargav Acharya; Editing by Jane Merriman and Jonathan Oatis)