South Africa’s rand weakened slightly in early trading on Tuesday as rising oil prices and uncertainty over efforts to end the conflict involving Iran weighed on investor sentiment, while markets awaited key economic data from the central bank.
The rand traded at 16.3375 against the U.S. dollar at 0619 GMT, about 0.3 percent weaker than its previous close.
Brent crude futures climbed 2 percent as hopes for a swift resolution to the conflict and the reopening of the Strait of Hormuz faded. Concerns over disruptions to global oil supplies continued to support higher energy prices.
U.S. Secretary of State Marco Rubio said negotiations with Iran could “take a few days,” dampening expectations of an immediate breakthrough after U.S. forces carried out what Washington described as defensive strikes in southern Iran.
Investors are now focused on data expected from the South African Reserve Bank at around 0700 GMT. The bank is due to release its March leading business cycle indicator, which tracks trends in vehicle sales, business confidence, money supply and other economic factors.
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The indicator edged up to 120.2 points in February from 119.6 points in January, signalling modest improvement in economic activity before the latest global tensions emerged.
Research firm ETM Analytics said the earlier rise in the leading indicator suggested South Africa’s economy had been on course for another year of improved growth. However, it warned that conditions were now deteriorating as inflation accelerates, interest rates are expected to rise, gold prices retreat and fiscal pressures increase.
The firm added that economic growth in 2026 was likely to weaken under the changing conditions.
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Attention is also turning to Thursday’s interest rate decision by the South African Reserve Bank, with economists surveyed by Reuters expecting a 25-basis-point rate increase.
