The South African (SA) Rand weakened in early trading on Tuesday as rising tensions in the Middle East dampened risk appetite and supported the Dollar.
The Rand traded at 16.2675 against the Dollar, about 0.3% weaker than its previous close.
The United States Dollar was stronger against a basket of currencies, with oil prices rising for a third session.
SA imports the majority of its fuel, making it sensitive to the surge in global energy costs since the war started in late February.
Iran said it would shift to a “fully offensive” military posture because efforts to negotiate a permanent end to the war have stalled, a senior Iranian official told Reuters as Washington ruled out extending their June ceasefire agreement.
The more than five-month-long conflict has upended the global rates outlook and stoked inflationary concerns through most of the year.
On the domestic front, investors will focus on SA’s July inflation data due on Wednesday, with economists expecting annual inflation to ease to 4.5% from 5.0% in June.
The SA Chamber of Commerce and Industry is due to publish its July Business Confidence Index on Tuesday, providing a measure of private-sector sentiment in Africa’s largest economy.
SA’s benchmark 2035 government bond weakened in early deals, as the yield rose 7 basis points to 8.545%.
–Reuters–
