Market News

JOHANNESBURG, Jan 15 (Reuters) – The South African rand was steady in early trading on Thursday, after U.S. President Donald Trump calmed market anxiety over potential U.S. military action against Iran.

Like other risk-sensitive currencies, the rand often takes its cues from global drivers such as U.S. policy.

At 0741 GMT it traded at 16.4050 against the dollar, unchanged from its previous closing level.

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Trump said on Wednesday afternoon that killings during Iran’s crackdown on nationwide protests were subsiding and suggested that he was adopting a wait-and-see posture toward the crisis.

The U.S. dollar was slightly stronger against a basket of currencies, while gold prices trailed back as Trump’s seemingly softer geopolitical tone dampened safe-haven demand.

He also said on Wednesday that he had no plans to fire Fed Chair Jerome Powell, despite the Justice Department criminal investigation, but added it was “too early” to say what he would ultimately do.

South Africa’s local currency is expected to remain range-bound as traders continue to track developments on the unrest in Iran, the Fed’s independence and a potential extension of the U.S. trade preference programme, the African Growth and Opportunity Act (AGOA)

The U.S. House of Representatives approved a three-year extension, but uncertainty remains over whether South Africa will be excluded, given strained diplomatic relations between Washington and Pretoria.

The bill will next go to the U.S. Senate.

On the Johannesburg Stock Exchange, the Top-40 index was last up 0.4% in early trade.

South Africa’s benchmark 2035 government bond was flat with the yield at 8.295%.