Rand Slips as Oil Prices Rise, Iran Deal Hopes Fade
By Aboki Forex —
JOHANNESBURG — South Africa's rand edged lower on Tuesday morning, weighed down by rising oil prices as hopes for a quick resolution to the Iran conflict remain uncertain.
At 0619 GMT, the rand traded at 16.3375 against the dollar, down about 0.3% from its previous close.
Brent crude futures climbed 2% as a deal to end the war and reopen the Strait of Hormuz stayed out of reach. U.S. Secretary of State Marco Rubio said negotiating with Iran could take a few days, dashing expectations for an immediate end to hostilities after U.S. forces conducted what Washington called defensive strikes in southern Iran.
Central Bank Data in Focus
Later on Tuesday, the South African Reserve Bank will release the country's leading business cycle indicator for March. The indicator tracks data including vehicle sales, business confidence, and money supply.
In February, the leading indicator improved marginally to 120.2 points from 119.6 points in January.
ETM Analytics said in a research note that the continued increase suggests the domestic economy was on track for another year of improved growth before recent developments. But it warned that supporting factors are now reversing. Inflation is rising sharply, interest rates are likely to increase, gold prices have slipped, the fiscal outlook is expected to worsen, and economic growth in 2026 will likely be weaker.
Interest Rate Decision Ahead
The South African Reserve Bank will announce its interest rate decision on Thursday. Economists polled by Reuters expect a 25 basis point hike.
South Africa's benchmark 2035 government bond was flat in early deals, with the yield at 8.515%.