South Africa's rand, government bonds and stocks rose on Wednesday, paring some of the losses incurred since the start of the Iran war after US President… donald trump A two-week ceasefire was agreed upon.
Trump's stance came shortly before a deadline he had set for Iran to reopen the Strait of Hormuz – a key shipping route for about 20% of global oil – or face widespread attacks on its civilian infrastructure.
At 1232 GMT, the rand was up 3% against the dollar at 16.3175, trading near its strongest level in almost a month. The currency has been highly sensitive to fluctuations in global risk sentiment since the conflict began on February 28, triggering Iranian retaliation and increasing volatility in emerging markets.
South Africa's benchmark 2035 government bond rose, with its yield falling 55.5 basis points to 8.545%. On the Johannesburg Stock Exchange, the top-40 index was last up 6.2%. News of the ceasefire sent markets reeling for weeks, sending oil prices below $100 a barrel and driving up assets in net-energy-importing countries like South Africa.
“Depending on how the talks progress, the rand could extend its recovery to the 16.00 per dollar handle and minimize most of the damage seen earlier this month,” ETM Analytics said. He said the situation remains temporary and delicate.
It said rising prices of key South African exports gold and platinum should provide additional support to local asset prices.