South African rand slips as US-Iran stalemate pushes oil prices higher
USO•The rand weakened about 0.5% to 16.40 per dollar in early trade as oil prices rose more than 3%, with Brent above $107 a barrel. South Africa’s Top-40 index fell 1.7%, while the 2035 bond yield rose 5.5 basis points to 8.855%.
1. Rand and markets weaken
The rand slipped about 0.5% to 16.40 against the dollar at 0734 GMT on Monday as the US-Iran standoff pushed oil prices higher, weighing on currencies in oil-importing economies. South Africa imports most of its fuel, leaving its economy vulnerable to swings in global oil prices since the conflict began in late February.
2. Oil and market moves
Oil prices climbed more than 3%, with Brent crude last above $107 a barrel after US President Donald Trump rejected a peace deal with Iran to resolve their conflict and reopen the Strait of Hormuz. On the Johannesburg Stock Exchange, the Top-40 index fell 1.7% in early trade, and the yield on South Africa’s benchmark 2035 government bond rose 5.5 basis points to 8.855%.
3. Gold Fields falls
Gold Fields led losses, dropping about 13% after Australia’s Northern Star Resources said it had rejected an unsolicited A$38.7 billion ($27.1 billion) takeover approach. Andre Cilliers of TreasuryONE said rand volatility could be elevated this week as a busy US data calendar culminates in Friday’s non-farm payrolls report.
