The South African (SA) Rand slipped half a percent in early trade on Monday as the United States (US) Iran standoff continued to drive oil prices higher, weighing on risk-sensitive currencies in oil-importing economies.
The Rand traded at 16.40 against the Dollar, about 0.5% weaker than its previous close.
Oil prices climbed more than 3% on Monday with Brent crude futures last above $107 a barrel, after US President Donald Trump rejected a peace deal with Iran to resolve their conflict and reopen the Strait of Hormuz.
SA imports most of its fuel, leaving the economy vulnerable to swings in global oil prices since the Iran conflict began in late February.
“Volatility in the rand could be elevated this week as the data calendar is jam-packed with data out of the US, culminating in the US non-farm payrolls on Friday,” said Andre Cilliers at TreasuryONE.
On the Johannesburg Stock Exchange, the Top-40 index tab fell 1.7% in early trade.
Gold Fields led losses, dropping about 13% after Australia’s Northern Star Resources said it had rejected an unsolicited $27.1 billion takeover approach.
SA’s benchmark 2035 government bond also weakened, as the yield rose 5.5 basis points to 8.855%.
–Reuters–
