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The South African rand has experienced a significant rally Tuesday, driven by a combination of US inflation data and shifts in global monetary policy. The currency surged over 2% to R18.22/$ amid a weakening dollar, as the latest US inflation figures suggested a potential pause in interest rate hikes by the Federal Reserve.

Moreover, this quarter's inflows into South Africa have reached 17.5 billion rand ($965 million). The Bloomberg EM Local Currency South Africa Bond Index saw its most significant daily gain in four months on Tuesday and is currently trading near its highest level since July.

This rally coincides with newly released economic data from South Africa indicating a decrease in Q3 unemployment to 31.9%. The combination of favorable local economic data and international market dynamics has bolstered investor confidence in the South African currency.

The dollar-rand carry trade has returned 4.7% this quarter, a notable recovery after an 8.2% loss in the first nine months of the year.

https://www.investing.com/news/forex-news/south-african-rand-rallies-amid-us-inflation-data-and-monetary-policy-shifts-93CH-3235210