JOHANNESBURG (Reuters) -South Africa’s rand firmed on Friday after a day of volatile trading, as the U.S. dollar gave up its gains from reports of an overnight Israeli attack on Iran.
In the latest tit-for-tat exchange between the two arch-foes, Israel launched an attack on Iranian soil, sources told Reuters. Iranian state media reported that drones had been shot down.
The rand initially hit a near two-month low of 19.3800 to the dollar in a sell-off of risk assets as investors scurried towards safe-haven dollar and gold.
However, some calm returned to the markets after Tehran downplayed the incident and signalled it had no plans to retaliate.
As of 1538 GMT, the rand traded at 19.1000 against the dollar, about 0.3% stronger than its previous close.
The dollar was down about 0.2% against a basket of currencies.
“Looking ahead, it is clear that market volatility will persist as geopolitical tensions in the Middle East continue to exert a significant influence on global financial dynamics,” said Andre Cilliers, currency strategist at TreasuryONE.
On the stock market, the Top-40 index closed 0.18% higher.
South Africa’s benchmark 2030 government bond was weaker, with the yield up 9.5 basis points at 10.775%.
(Reporting by Bhargav Acharya and Nellie Peyton; Editing by Alex Richardson and Richard Chang)
