JOHANNESBURG, May 18 (Reuters) - The South African rand gained against a weaker dollar on Monday, as domestic investors awaited inflation data expected to reflect pressures from the war in the Middle East.
o At 1237 GMT, the rand traded at 16.6050 against the dollar, up about 0.6% from its previous close.
o Statistics South Africa will release April inflation data on Wednesday, with analysts polled by Reuters expecting it to accelerate to 3.9% year on year, up from 3.1% in March.
o ETM analytics said in a note that it expects domestic inflation to head towards 5% if oil prices remain high and the local currency depreciates further.
o As a net fuel importer, South Africa is heavily exposed to the spike in global energy prices.
o "The situation in the Middle East has already dragged on too long, and second-round inflationary pressures are now just a matter of time," said ETM Analytics.
o The statistics agency will also publish retail sales data on Wednesday, though analysts say the March figures are unlikely to show weakness as they predate the full impact of the Iran war that began at the end of February.
o On the Johannesburg Stock Exchange, the Top-40 index was down 0.2% in early trade.
o South Africa's benchmark 2035 government bond was also weaker, with the yield up 6.5 basis points at 8.88%.
(Reporting by Sfundo Parakozov and Nilutpal TimsinaEditing by David Goodman and Barbara Lewis)
