South African rand subdued as investors eye US-Iran talks, domestic events

JOHANNESBURG: The South African rand was subdued in early trade on Tuesday as investors awaited ​potential US-Iran talks and key domestic data and ‌events later this week, including inflation figures and the central bank’s policy decision.

At 0706 GMT, the rand traded ​at 16.2825 against the dollar , 0.2% weaker than ​its previous close.

Tehran and Washington exchanged threats on ⁠Sunday, though US President Donald Trump said he would ​be open to meeting Iranian President Masoud Pezeshkian, who ​is expected to be in New York this week for the UN meeting.

Traders are focused on August inflation data and ​the South African Reserve Bank’s policy decision, both ​due on Wednesday.

Economists polled by Reuters expect annual inflation to accelerate ‌to ⁠4.5%, while the central bank is widely expected to deliver a 25-basis-point rate hike after leaving rates unchanged at its previous meeting.

Separately, South Africa’s central ​bank said ​on Tuesday ⁠that its composite leading business cycle indicator fell 0.9% month-on-month in July.

Like other risk-sensitive ​currencies, the rand often takes cues ​from global ⁠developments, in addition to domestic economic data.

On the Johannesburg Stock Exchange, the Top-40 index was down 0.3% ⁠in ​early trade.

South Africa’s benchmark 2035 ​government bond was also weaker in early deals, as the yield ​rose 2 basis points to 8.65%.