South African rand weakens as spike in oil prices weighs
JOHANNESBURG, June 23 (Reuters) - The South African rand weakened in early trade on Monday, pressured by the rise in crude oil prices and risk-off sentiment following the U.S. military action against Iran over the weekend.
At 0659 GMT the rand traded at 18.08 against the dollar , down roughly 0.4% from Friday's close.
The greenback edged up against a basket of currencies on heightened safe-haven demand, while oil prices rose about 1.4% as investors anxiously awaited Iran's response.
Market participants are bracing for further oil price hikes amid fears that an Iranian retaliation may include the closure of the Strait of Hormuz, through which roughly a fifth of global crude supply flows.
South Africa's economic calendar will be relatively quiet on Monday and "market moves will be driven by geopolitical events," said Andre Cilliers, Currency Strategist at TreasuryONE.
"Prices are likely to remain fairly volatile in the short term as traders await Iran's response to the U.S. attacks," said Cilliers.
Domestically, investors will look to leading indicator (ZALEAD=ECI), opens new tab and producer inflation (ZAPPIY=ECI), opens new tab data due on Tuesday and Thursday respectively to gauge the health of Africa's most industrialised economy.
South Africa's benchmark 2035 government bond was weaker in early deals, as the yield rose 2.5 basis points to 10.075%.
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