JOHANNESBURG, June 3 (Reuters) – The South African rand weakened in early trading on Wednesday as renewed tensions in the Gulf rattled sentiment after U.S.-Iran talks stalled, while domestic investors also digested a business survey pointing to a contraction in activity.
- At 0742 GMT, the rand traded at 16.30 against the dollar, down roughly 0.4% from its previous close.
- The U.S. Central Command said Iran launched ballistic missiles toward regional neighbours but all failed to hit their targets, adding that American forces conducted strikes on Qeshm Island in response to the attempted attacks by Tehran.
- The renewed strikes occurred as diplomatic talks between Iran and the U.S. remained at a stalemate, keeping the market mood sombre and the dollar on the front foot.
- Like other risk-sensitive currencies, the rand often takes its cues from global drivers and has been largely influenced by shifting market sentiment in recent months.
- South Africa’s private sector contracted in May as output and new orders fell amid higher fuel prices and uncertainty linked to the U.S.-Israeli war on Iran, a business survey showed on Wednesday.
- Despite the weaker business environment, firms were more optimistic about the outlook for the year ahead, the survey showed.
- On the Johannesburg Stock Exchange, the Top-40 index was down 0.4%.
- South Africa’s benchmark 2035 government bond also weakened in early deals, as the yield rose 5.5 basis points to 8.5%.
Choose CNBC Africa as your preferred source on Google and never miss a moment from the most trusted name in business news.