The rand was little changed on Friday morning, near the end of a relatively subdued week for currency markets. The local currency was only marginally weaker against the dollar on the week, but the short-term underlying trend pointed to a strengthening bias. The stronger rand bodes well for the outlook on inflation, which the Reserve Bank expects to average 5.3% in the second half of 2017. The positive global sentiment has helped cushion the rand against political shocks, which included the removal of Pravin Gordhan as finance minister earlier in the year. With inflation in the US still running below the US Federal Reserve’s 2% target, markets expect the Fed to raise interest rates at a slower pace than initially anticipated. The Fed’s less aggressive stance has the potential to support higher-yielding, emerging-market currencies. The US second-quarter GDP will be in focus later in the afternoon, with markets expecting the world’s largest economy to have expanded at an annual rate of...
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