South Africa’s (SA) Rand weakened in early trade on Friday as a stronger Dollar and rising oil prices weighed on ​risk sentiment, with global markets also watching the final ‌day of the summit between United States (US) President Donald Trump and China’s Xi Jinping.

The Rand traded at 16.6426 against the Dollar, about 1% down ​from its previous close.

The greenback was firmer against a basket ​of currencies and was set for its biggest weekly gain ⁠in more than two months.

Global oil prices rose more than 1% ​after Trump said China wanted to buy oil from the US and ​as concerns persisted over ship attacks and seizures in the Strait of Hormuz despite Iran saying around 30 vessels had passed through the waterway.

“The risk-sensitive rand has ​weakened sharply this morning in line with the weaker emerging ​market and commodity currencies,” said Andre Cilliers, Currency Strategist at TreasuryONE, adding that ‌rate ⁠hike and inflation fears were weighing on risk sentiment.

Like other risk-sensitive currencies, the rand often takes cues from global drivers. It has been at the mercy of global market sentiment since the start ​of the US and Israeli ​war with Iran ⁠at the end of February.

“The rand closed at 16.45 yesterday, but even since the announcement of ​US data, it has been riding on the back ​of ⁠commodity prices, especially platinum. These all came off last night, quite quickly, coupled with the oil price moving up,” Adam Phillips, treasury specialist ⁠at ​Umkhulu Treasury, wrote in a note.

SA’s ​benchmark 2035 government bond was weaker in early deals, as the yield rose 1 ​basis point to 8.765%.

–Reuters–