Home Trending Now Rand edges up after slump on Iran-US tensions

Rand edges up after slump on Iran-US tensions


The rand sank against the dollar last week as investors fretted that the killing of Iran’s most prominent military commander by the US could trigger a broader Middle East conflict, prompting them to dump riskier assets.

JOHANNESBURG – South Africa’s rand rebounded slightly in late trade on Monday after a steep fall last week, joining some other emerging market currencies in paring some losses even as Iran and the United States traded threats.

At 1557 GMT, the rand was trading at 14.2290 per dollar, 0.5% stronger than its New York close on Friday.

Cristian Maggio, head of emerging markets strategy at TD Securities, said there was no obvious reason for the rand or other emerging market currencies, such as the Czech crown or Mexican peso, to strengthen.

“I think today is just a technical rebound,” Maggio said. “There’s nothing really new that has happened and perhaps the market is taking a chance to take a contrarian view, in the short term at least.”

The rand sank against the dollar last week as investors fretted that the killing of Iran’s most prominent military commander by the United States could trigger a broader Middle East conflict, prompting them to dump riskier assets.

The currency also started Monday weaker following the resumption of power cuts at South Africa’s struggling state utility Eskom.

The state-run electricity firm is battling to keep the lights on in Africa’s most industrialised economy, and its fragility is one of the biggest challenges for President Cyril Ramaphosa and his bid to revive growth.

Stocks however continued to struggle as markets waited to see how the situation in the Middle East would unfold. US President Donald Trump has warned of a “major retaliation” should Tehran strike back, while Iran’s replacement commander vowed to expel the United States from the region.

The Johannesburg Stock Exchange’s Top-40 index closed down 1.04% at 50,999 points, while the broader All-Share index fell by the same amount to 57,195 points.

Gold stocks were however among only a handful of firms on the blue-chip index to rise, as a retreat to safe-haven assets pushed the gold price to its highest since 2013.

Producers Sasol and Goldfields topped the index, up 2% and 0.7% respectively, with Anglo American Platinum rising 0.3%.

In fixed income, the yield on the benchmark government bond due in 2026 was down 1 basis point at 8.25%.

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