The South African (SA) Rand edged lower in early Tuesday dealings as market sentiment remained cautious amid continuing conflict in the Middle East, after the United States (US) embassy in Iraq was hit by a drone attack.
Rand traded at 16.77 against the Dollar, about 0.6% weaker than its previous close.
A wave of drone and rocket attacks targeted the US embassy in Baghdad early on Tuesday, Iraqi security sources said, describing it as the most intense assault since the attacks began, with at least five drones used.
“I cannot see the Rand pushing too much stronger, unless something gives. Especially after the US embassy in Iraq was hit by a drone attack last night and continued action in Lebanon,” said Adam Phillips, Treasury Specialist at Umkhulu Treasury.
The Dollar was flat against a basket of currencies as investors look to the Federal Reserve’s two day policy meeting that begins later on Tuesday.
The Fed is widely expected to hold rates for a second straight meeting when it announces its policy decision on Wednesday.
Like other risk-sensitive currencies, the Rand often takes cues from global drivers, in addition to domestic economic data.
SA’s benchmark 2035 government bond was also weaker in early deals, with the yield rising 9.5 basis points to
–Reuters–
