The South African rand edged up in early trade on Wednesday, as traders awaited inflation and retail sales data that will shed light on the country's economic outlook.

At 0624 GMT, the rand traded at 16.39 against the dollar, about 0.2% firmer than its previous close.

Domestically-focused traders are waiting for December consumer inflation data due at 0800 GMT and November retail sales at 1100 GMT.

Economists polled by Reuters expect annual inflation will come in at 3.6% for December, up from 3.5%.

This is inline with Nedbank economists who anticipate inflation will rise slightly from 3.5% in November to 3.6%, mainly due to higher fuel prices.

The bank's economists said petrol prices increased by 1.4% during the month, leading to a smaller year-on-year decline in fuel costs.

"On the positive side, food inflation is likely to ease marginally from 4.4% to 4.3% as softer cereal and other food prices offset the impact of persistent meat price increases linked to foot-and-mouth disease," said Nedbank in a research note.

Retail sales are forecast to rise from 2.9% in October to 4.8% in November, reflecting the surge in spending associated with Black Friday promotions, based on Nedbank's forecasts.

Economists polled by Reuters expect retail sales to edge down to 2.5% in November from 2.9% the month prior.

South Africa's benchmark 2035 government bond was also firmer in early deals, as the yield fell 1.5 basis points to 8.43%.