JOHANNESBURG, May 4 (Reuters) – The South African rand weakened on Monday, pressured by a firmer U.S. dollar and a jump in oil prices, as escalating tensions between the United States and Iran weighed on global market sentiment.
o At 1334 GMT, the rand traded at 16.6925 against the dollar, down 0.5% from its previous close.
o The safe-haven U.S. dollar edged higher against a basket of currencies, while oil jumped over 3% to more than $110 a barrel.
o Tehran said it had forced a U.S. warship to turn back from the Strait of Hormuz, although U.S. Central Command quickly denied a report by Iran’s semi-official Fars news agency that two missiles had hit the vessel.
o The rand has been at the mercy of global market sentiment since the U.S. and Israel launched their war on Iran in late February and Tehran subsequently retaliated.
o South African manufacturing sentiment improved in April as output and new sales orders rebounded after a weak first quarter.
o Separately, data from South Africa’s auto association NAAMSA showed that new vehicle sales increased by 13% year-on-year in April, compared with a 17.3% increase recorded in March, as domestic demand continued to anchor the industry despite global uncertainty.
o “The latest outcome reflects a market still benefiting from earlier cyclical support, even as external shocks continue to reshape the operating environment,” NAAMSA said in a statement.
o On the Johannesburg Stock Exchange, the Top-40 index was down 0.2%.
o South Africa’s benchmark 2035 government bond was slightly firmer, as the yield fell 1 basis point to 8.785%.
(Reporting by Sfundo Parakozov and Nilutpal Timsina;Editing by Louise Heavens and Joe Bavier)