By 0820 GMT, the rand was at 16.84 to the dollar, up 0.2 percent from the previous session and close to its strongest level this year.

At the current exchange rate, one dollar buys roughly 16.84 rand, giving global investors more confidence in the currency’s near-term outlook.

Gold hovered near a seven-week high,providing an additional lift for the rand. As one of the world’s key producers of precious metals, South Africa often benefits when bullion prices strengthen.

Analysts say this dynamic appears to be working in the country’s favour again. Traders are now turning their attention to consumer inflation data for November, scheduled for release on Wednesday, December 17.

The numbers carry added weight after the government reduced its inflation target to 3 percent last month.

Headlineinflation currently stands at 3.6 percent year-on-year, and economists surveyed by Reuters expect it to remain unchanged.

In a note to clients, ETM Analytics said the currency was likely to end the week on a positive footing, adding that an improvement in global risk sentiment had also supported the rand’s performance.

The coming week features several data points that could influence market direction.

Source: Africabusinessinsider