The rand had firmed against major global currencies shortly before midday on Wednesday, with the local currency gaining after Statistics SA reported that inflation moderated in January.

Inflation, measured by the annual change in the consumer price index (CPI), slowed to 4.4% in January from 4.7% in December, beating a Trading Economics consensus forecast of 4.5%. The print has slightly increased the prospect of an interest-rate cut in March, although focus will remain on the tabling of the budget later on Wednesday.

Investors and ratings agencies are looking for clear signs that the government will both contain its spending, and pursue pro-growth policies. This comes as the state seeks to avoid the damage that would result from further credit ratings downgrades.

A lot has already been priced in, but a budget that matched market expectations would allow for further rand gains, said Rand Merchant Bank currency strategist John Cairns. Volatility after 2pm, when the budget will be released, should be expected.

Globally, focus is on the release of the minutes from the US Federal Reserve’s open market committee’s January meeting. The minutes will be closely scrutinised for signals on future interest-rate increases in the US, with some expectation that there may be four interest rate increases in 2018, as opposed to the Fed’s forward guidance of three.

At 11.30am, the rand was at R11.7321 to the dollar from R11.7301, at R14.4586 to the euro from R14.4706, and at R16.3813 to the pound from R16.4173. The euro was at $1.2324, from $1.2336.