South African rand holds near multi-month high as Iran sanctions loom
- the rand traded at 15.99 against the dollar , up about 0.2% and not far from its strongest level since the start of the Iran war touched earlier in the session
JOHANNESBURG: The South African rand opened the week on a firm footing on Monday, hovering near its strongest level since the start of the Iran war, as a subdued dollar, higher gold prices and strength across emerging-market currencies supported the commodity-linked currency.
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At 0636 GMT, the rand traded at 15.99 against the dollar , up about 0.2% and not far from its strongest level since the start of the Iran war touched earlier in the session.
South Africa’s key export, gold, hit its highest level in more than three months as a subdued dollar lent support, while investors looked ahead to key U.S. inflation data and a speech by Federal Reserve Chair Kevin Warsh later this week.
The dollar was pinned near multi-month lows as traders awaited details of a fresh U.S. sanctions package against Iran.
US Treasury Secretary Scott Bessent is due to hold a press conference at 1800 GMT after threatening “the toughest sanctions in history” on Iran, while Iran’s foreign minister dismissed the threat of new U.S. sanctions as a sign of desperation.
Wichard Cilliers, head of market risk at TreasuryONE, said the rand’s rally was being driven by broad dollar weakness, strong emerging-market sentiment and higher gold prices.
Like other risk-sensitive currencies, the rand has been at the mercy of global market sentiment, particularly since the start of the U.S.-Iran war on February 28.
South Africa’s benchmark 2035 government bond was slightly firmer in early deals, as the yield fell 1.5 basis points to 8.565%.
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