South African rand volatile as investors react to US data, domestic politics

JOHANNESBURG, June 26 (Reuters) - The South African rand was flat in choppy Thursday trading as investors reacted to key U.S. economic indicators and the removal of a South African deputy trade minister.

At 1432 GMT, the rand traded at 17.7325 against the dollar ZAR=D3, roughly in line with Wednesday's close.

The rand had gained almost 1% over the greenback =USD after a media report said U.S. President Donald Trump considered selecting and announcing Federal Reserve Chair Jerome Powell's replacement by September or October to undermine his position.

But it later weakened against a rebounding dollar and after South African President Cyril Ramaphosa removed from his position as deputy trade minister a politician from the Democratic Alliance (DA), said Shaun Murison, senior market analyst at IG.

Murison added that higher-than-expected U.S. core inflation data released on Thursday also added to the rand's volatility.

Domestic data showed that producer inflation ZAPPIY=ECI, ZAPPI=ECI slowed to 0.1% in May, according to Statistics South Africa.

Economists polled by Reuters expected the producer inflation to come in at 0.7% year-on-year from 0.5% recorded in April.

Separately, a quarterly bulletin by the South African Reserve Bank showed that foreign direct investment outflows grew by 61% quarter-on-quarter in the three months to March 31, even as inflows grew by 56%.

The Johannesburg Stock Exchange's Top-40 index .JTOPI last traded up 0.8%.

South Africa's benchmark 2035 government bond ZAR2035= was weaker, as the yield rose 3 basis points to 9.955%.