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South Africa's Rand Weakens; Focus on Inflation, Fed Meeting

JOHANNESBURG, Dec 13 (Reuters) - The South African rand fell in early trade on Monday as traders awaited inflation data due later in the week, as well as a U.S. Federal Reserve meeting to learn how quickly it plans to finish unwinding its bond-buying programme.

At 0645 GMT, the rand traded at 16.0025 against the dollar, 0.2% weaker than its previous close, with concerns about the coronavirus also weighing on sentiment.

"The foreign exchange markets continue to grapple with a lack of liquidity as market participants choose to remain on the sidelines as the latest COVID-19 variant again wreaks havoc with the global prospects of an economic recovery," Nedbank analysts wrote in a note, also pointing out the Fed meeting in the week.

The Federal Reserve's two-day gathering wraps up on Wednesday and investors now expect the Fed to signal a faster tapering of asset buying, and thus an earlier start to rate hikes.

Locally, traders' focus was on November consumer price inflation and production price inflation data due on Wednesday.

In fixed income, the yield on the benchmark 2030 government bond was down 0.5 basis point to 9.485%.

Reporting by Olivia Kumwenda-Mtambo

Source: Reuters

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