JOHANNESBURG, Oct 18 Reuters South Africa39;s rand firmed in early trade on Friday, paring some losses from Thursday, ahead of a domestic inflation reading next week which could provide clues on the central bank39;s rate cutting path.

At 0630 GMT, the rand traded at 17.60 against the dollar , about 0.4 stronger than its previous close.

The dollar last traded about 0.2 softer against a basket of currencies.

Yesterdays blowout raises the possibility that the phase of ZAR weakness has now completed, and that the local unit could make a stronger recovery as we close out the week, ETM Analytics wrote in a research note.

Next week, domestic investors will look to September39;s consumer inflation figures which could provide clues on the South African Reserve Bank39;s interest rate path.

The central bank cut its main lending rate for the first time in more than four years in September, a day after data showed headline inflation fell just below 4.5, the middle of the central bank39;s target range.

On Thursday, South Africa39;s central bank governor Lesetja Kganyago said the country could move to a lower inflation target at little cost.

One of the requirements for a stable currency is low inflation; therefore, any talk of lowering the inflation target should be mildly supportive of the ZAR, ETM Analytics wrote.

South Africa39;s benchmark 2030 government bond was little changed in early deals.

Reporting by Tannur Anders; Editing by Hugh Lawson

Source Reuters