The rand weakened in early trade on Monday as the conflict in the Middle East rattled investors and added to global economic uncertainty.
At 7.03am GMT the rand traded at R16.16 against the dollar, about 1.4% down from its Friday close.
At the weekend, the US and Israel carried out major strikes on Iran that killed Supreme Leader Ayatollah Ali Khamenei. Iran has retaliated with missile and drone attacks across parts of the Middle East.
The dollar gained 0.2% against a basket of currencies, with gold hitting its highest point in more than four weeks.
“Although the US is involved, and the Trump administration’s stance on tariffs continues to undermine the dollar’s value, it remains a haven for investors seeking to shield themselves from the volatility that might follow this weekend’s events,” said ETM Analytics in a research note.
Like other risk-sensitive currencies, the rand often takes cues from global drivers such as US policy in addition to domestic economic data.
An Absa purchasing managers index (PMI) survey is set to be on Monday and will shed light on manufacturing conditions in Africa’s most industrialised economy.
Manufacturing sentiment improved in January thanks to a pick-up in business activity.
Investors will then turn their focus to vehicle sales data for February later in the day, which will give a snapshot of consumer demand for big-ticket items.
The benchmark 2035 government bond was also weaker in early trade, as the yield rose 8.5 basis points to 7.97%.
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