By Reuters
The South African rand weakened in early trade on Monday as the ongoing conflict in the Middle East rattled investors and added to global economic uncertainty.
At 0703 GMT the rand traded at 16.16 against the dollar , about 1.4% down from its Friday close.
Over the weekend, the United States and Israel carried out major strikes on Iran that killed Supreme Leader Ayatollah Ali Khamenei. Iran has retaliated with missile and drone attacks across parts of the Middle East.
The dollar gained 0.2% against a basket of currencies, with gold – a major South African export – hitting its highest point in more than four weeks.
“Although the U.S. is involved, and the President Donald Trump administration’s stance on tariffs continues to undermine the USD’s value, it remains a haven for investors seeking to shield themselves from the volatility that might follow this weekend’s events,” said ETM Analytics in a research note.
Like other risk-sensitive currencies the rand often takes cues from global drivers such as U.S. policy in addition to domestic economic data.
An Absa PMI survey is set to be released at 0900 GMT and will shed light on manufacturing conditions in Africa’s most industrialised economy.
South African manufacturing sentiment improved in January thanks to a pickup in business activity.
Investors will then turn their focus to vehicle sales (ZAVEHY=ECI), opens new tab data for February due around 1200 GMT, which will give a snapshot of consumer demand for big-ticket items.
South Africa’s benchmark 2035 government bond was also weaker in early deals, as the yield rose 8.5 basis points to 7.97%.
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