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South Africa’s rand slipped in early Tuesday trading, reflecting growing unease in the markets as tensions in the Middle East continue to rattle investor confidence.
By 0718 GMT, the rand was trading at 16.77 against the dollar, about 0.6 percent weaker than its previous close, as traders reacted cautiously to fresh security concerns.
The pressure on the currency followed reports of a renewed escalation in Iraq, where the U.S. embassy in Baghdad was targeted in a coordinated attack. Iraqi security sources said a wave of drones and rockets struck the area early Tuesday, describing it as the most intense assault since the incidents began, with at least five drones deployed.
The developments have added to global uncertainty, leaving markets on edge and weighing on risk-sensitive currencies like the rand.
The Fed is widely expected to keep interest rates unchanged for a second consecutive meeting when it announces its decision on Wednesday.
The rand, like other risk-sensitive currencies, continues to take direction from global market developments alongside domestic economic data.
Meanwhile, South Africa’s benchmark 2035 government bond weakened in early trading, with its yield rising by 9.5 basis points to 9.025 percent.
