South African rand edges up as next week's medium — term budget draws focus

JOHANNESBURG, Oct 15 (Reuters) — The South African rand edged up in early trade on Thursday as the dollar slipped from an 18-month peak, with investors looking ahead to next week's medium-term budget for clues on the country's fiscal outlook and credit rating prospects. At 0638 GMT, the rand traded at 16.5575 against the dollar, about 0.3% firmer than its previous close. The dollar index, which measures the greenback against a basket of peers, fell, ceding most of the gains it made after stronger-than-expected US inflation data on Wednesday pushed it to an 18-month high. Investors will be watching Finance Minister Enoch Godongwana's medium-term budget policy statement next week amid expectations of an improving budget balance and a more favourable ratings outlook. "The rand is looking to US markets for direction, but the (medium-term budget policy statement) will keep traders in limbo," ETM Analytics said in a note. South Africa's benchmark 2035 government bond was also firmer in early deals, as the yield fell 6.5 basis points to 8.69%. (Reporting by Nilutpal Timsina; Editing by Joe Bavier) ((Nilutpal.Timsina@tr.com)