JOHANNESBURG, Sept 20 (Reuters) – The South African rand softened in early trade on Friday, cooling off after strong gains in a week that saw interest rate cuts by both the U.S. Federal Reserve and the South African Reserve Bank (SARB), plus a local inflation print.

At 0715 GMT, the rand traded at 17.50 against the dollar, about 0.1% weaker than its previous close.

The local unit has gained about 1.4% against the greenback this week.

“The rand is likely to remain within a R17.40/R17.70 range in the short term as it tracks international moves but we could see further profit-taking, given the rand’s recent strong run,” said Andre Cilliers, currency strategist at TreasuryONE.

The Fed cut interest rates by 50 bps on Wednesday, weakening the dollar and boosting the risk-sensitive rand.

Also on Wednesday, data showed that South Africa’s annual inflation rate fell to 4.4% last month, the lowest since April 2021 and just below the mid-point of the central bank’s 3% to 6% target range.

The SARB joined the easing club when it announced a 25 basis point (bps) rate cut on Thursday, the first time interest rates have been reduced in four years.

“We believe that the SARB has now entered a cycle of rate cuts,” said Volkmar Baur, Commerzbank FX analyst, in a research note.

“Further rate cuts are likely to follow, but these should not weigh on the rand if they are accompanied by structural improvements in the economy,” Baur added.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index was little changed in early trade.

South Africa’s benchmark 2030 government bond was slightly weaker in early deals, as the yield gained 3 basis points to 8.88%.

(Reporting by Tannur Anders; Editing by Ros Russell)