South Africa’s (SA) Rand weakened in early trade on Monday as rising oil prices amid renewed Middle East tensions weighed on global risk appetite, putting pressure on the currency.
The Rand traded at 16.6050 against the United States (US) Dollar , down about 0.3% from its previous close.
The Dollar was perched near a two-month high on Monday after a strong US jobs report boosted expectations for a Federal Reserve rate hike, while Brent oil prices jumped more than $4 a barrel.
Israel said it hit a petrochemical plant in Iran’s southwest, along with strikes elsewhere on military targets, even after US President Donald Trump reportedly told Israeli Prime Minister Benjamin Netanyahu to refrain from further attacks.
“Three forces are piling pressure on the local currency at the same time: the stronger greenback, rising oil prices and growing unease over the Israel-Iran conflict,” said Wichard Cilliers, head of market risk at TreasuryONE.
Like other risk-sensitive currencies, the rand often takes cues from global drivers. It has been at the mercy of global market sentiment since the start of the US and Israeli war on Iran at the end of February.
This week, SA focused investors will assess gross domestic product figures on Tuesday and current account mining and manufacturing on Thursday for cues on the health of Africa’s most industrialised economy.
On the Johannesburg Stock Exchange, the Top-40 index was down 0.6% in early trade.
SA’s benchmark 2035 government bond was also weaker in early deals, as the yield rose 13 basis points to 8.85%.
–Reuters–
