The South African (SA) Rand edged up in early trade on Wednesday as a softer Dollar and lower oil prices lent support to the risk-sensitive currency, while domestic investors awaited the release of a business conditions Purchasing Managers’ Index (PMI).
The Rand was trading at 16.35 against the Dollar, up about 0.2% from its previous close.
United States (US) President Donald Trump said his administration had “very good discussions” with Iran on Tuesday, fuelling expectations of an imminent end to the five-month conflict.
The US Dollar kept subdued on fresh optimism over the Middle East, while oil prices extended declines after steep falls in the two prior trading sessions.
Most Asian emerging-market currencies also strengthened on Wednesday, as hopes of easing US and Iran tension boosted risk appetite.
Prices of SA’s key mineral exports rose, with gold up nearly 2% and platinum gaining 1%.
Domestic investors will look to the July Standard and Poor’s Global PMI, for fresh insight into business conditions across the private sector.
A local manufacturing PMI on Monday showed SA sentiment deteriorated further in July, dragged down by weak export demand and concern over renewed hostilities between the US and Iran.
SA’s benchmark 2035 government bond was firmer in early deals, as the yield fell 7 basis points to 8.29%.
–Reuters–
