Johannesburg — The South African rand weakened on Monday as renewed tensions between the United States and Iran pushed oil prices higher, putting pressure on risk-sensitive currencies in oil-importing economies.
The rand traded about 0.5% weaker at 16.40 per dollar at 0734 GMT, extending losses as investors assessed the potential economic impact of higher energy costs and heightened geopolitical uncertainty.
Oil prices climbed more than 3%, with Brent crude futures trading above $107 a barrel, after U.S. President Donald Trump rejected a proposed peace deal with Iran aimed at resolving the conflict and reopening the Strait of Hormuz.
South Africa imports most of its fuel, leaving the economy particularly exposed to movements in international oil prices. The conflict, which began in late February, has added volatility to global energy markets and raised concerns about inflationary pressure in oil-importing economies.
“Volatility in the rand could be elevated this week as the data calendar is jam-packed with data out of the US, culminating in the US non-farm payrolls on Friday,” said Andre Cilliers of TreasuryONE.
South African stocks and bonds also weaken
The pressure extended beyond the currency market. On the Johannesburg Stock Exchange, the Top-40 index fell 1.7% in early trading.
Gold Fields was among the biggest decliners, falling about 13% after Australia's Northern Star Resources said it had rejected an unsolicited A$38.7 billion ($27.1 billion) takeover proposal.
South Africa's benchmark 2035 government bond also weakened, with its yield rising 5.5 basis points to 8.855%, reflecting broader pressure across local financial markets.
Source: Reuters
Reporting: Sfundo Parakozov
Editing: Sonali Paul
