The South African (SA) Rand strengthened in early trading on Monday, recovering some of last week’s ​losses as a pause in hostilities between ‌the United States (US) and Iran triggered a sharp decline in oil prices and improved market sentiment.

The Rand traded at 16.6650 ​against the Dollar, up about ​1% from its previous close.

The currency lost ⁠about 2% last week and came close to breaching 17 ​per dollar for the first time since April.

The decline ​was driven largely by the SA Reserve Bank’s decision to leave its benchmark lending rate unchanged, contrary to market expectations ​of an increase of 25 basis points.

“Some economists ​now say the rand’s medium-term trading range has shifted to 16.50-17.50 ‌per ⁠Dollar, although I think it would take something very significant for the currency to break through the 17.00 level in the medium term,” said Adam Phillips, ​analyst at Umkhulu ​Treasury.

Oil prices tumbled ⁠more than 6% on Monday after the US and Iran paused strikes over ​the weekend after two weeks of attacks, ​raising ⁠hopes of a diplomatic solution that would de-escalate the conflict and allow shipping to resume in the Strait ⁠of ​Hormuz.

SA’s benchmark 2035 government ​bond was stronger in early deals, as the yield fell 9 basis ​points to 8.65%.

–Reuters–