South African rand strengthens on US-Iran deal; inflation in focus
- The rand traded at 16.1725 against the dollar , about 0.8% up from its previous close
JOHANNESBURG: The South African rand strengthened in early trade on Monday, with the US dollar weakening after US and Iranian officials said they had reached an initial agreement to end their war.
At 0619 GMT, the rand traded at 16.1725 against the dollar , about 0.8% up from its previous close.
The US-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 South Africa will release May inflation data 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.
South Africa’s benchmark 2035 government bond was stronger in early deals, as the yield fell 10.5 basis points to 8.4%.‑Reuters
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