South African rand subdued as investors eye US-Iran talks, domestic events

The South African rand slipped 0.2% from its previous close, quoted at 16.2825 to the dollar in early Tuesday trading, Business Recorder reported. Currency traders were waiting for possible talks between the United States and Iran, after both sides exchanged threats on Sunday. Trump indicated a willingness to sit down with Iranian leader Masoud Pezeshkian, who is due in New York this week for UN events.

Both August inflation data and the South African Reserve Bank's policy decision are due on Wednesday, drawing close attention from traders. A Reuters poll of economists sees annual inflation picking up to 4.5%, while a 25-basis-point rate increase is widely anticipated after rates were held at the last meeting. Separately, the central bank said its leading business cycle gauge fell 0.9% month on month in July.

Across the Johannesburg Stock Exchange, the Top-40 index slipped 0.3% in early trading. South Africa's benchmark 2035 government bond also softened, with its yield up 2 basis points at 8.65%. The rand, like other currencies sensitive to risk, typically reacts to world events as well as to local economic figures.