JOHANNESBURG: South Africa's rand inched higher early on Tuesday, as investors took profits on a recent dollar surge ahead of a US decision on whether to pull out of the Iran nuclear agreement.
At 0650 GMT, the rand was 0.2 percent firmer at 12.5175 per dollar compared to a close of 12.5200 overnight in New York.
With a light data calendar locally, market participants are set to focus on events abroad, and with fundamentals still favouring dollar strength, pressure will remain on emerging currencies, rendering any rand gains brief.
"With no clear bullish local events on the horizon, we believe that the rand will continue to trade in line with the international environment which will be dictated by the U.S dollar," said analysts at Nedbank in a note.
Market participants were looking to take profits on stretched carry-trade positions amid concerns around slowing global growth and escalating trade tensions, said Nedbank's Mehul Daya and Walter de Wet.
US President Donald Trump is expected to make an announcement on the nuclear deal at 1800 GMT. A US withdrawal from the agreement, which eased economic sanctions in exchange for Tehran limiting its nuclear programme, would impact risk sentiment in the broader markets.
Stocks were set to open firmer, with the Top-40 futures index up 0.48 percent.
Bonds were slightly firmer, with the yield on benchmark paper due in 2026 down 0.5 basis points to 8.32 percent.
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