The South African (SA) Rand strengthened in early trade on Monday, with the United States (US) Dollar weakening after US and Iranian officials said they had reached an initial agreement to end their war.
The Rand traded at 16.1725 against the Dollar, about 0.8% up from its previous close.
The US and Iran framework is likely to lift the US blockade of Iranian ports and see Iran reopening the Strait of Hormuz. The US Dollar weakened to a 10-day low against its major peers on Monday.
Gold climbed 2.5% on Monday, hitting its highest level since June 9 and extending gains for a third straight session.
Statistics SA will release May inflation on Wednesday, with analysts polled by Reuters expecting it to accelerate to 4.7% year-on-year, from 4% in April.
Economists from Nedbank expect headline inflation to accelerate to 5.1% in May, its highest level since June 2024, from 4% in April.
“The main driver will again be a sharp increase in transport costs, reflecting a surge in fuel prices,” the bank’s economists said in a research note.
Traders will also watch retail sales data, due on Wednesday, for further clues on the health of Africa’s biggest economy.
SA’s benchmark 2035 government bond was stronger in early deals, as the yield fell 10.5 basis points to 8.4%.
–Reuters–
