The South African rand gained against the dollar on Tuesday as emerging-market currencies broadly advanced, even though a central bank gauge showed the country's business conditions worsening for a third straight month. Dollar weakness and rising commodity prices drove the move, while investors also weighed Washington's expanded sanctions on Iran.
South Africa's currency traded at 15.9550 against the U.S. dollar at 1311 GMT, strengthening by about 0.4% from its previous close. Broader emerging-market currencies rose alongside it, benefiting from continued weakness in the dollar and higher commodity prices, which increased appetite for risk-sensitive assets.
The gains came despite weaker domestic data. South Africa's central bank reported that its composite leading business cycle indicator dropped 1.4% month-on-month in June, the third consecutive monthly decline. The indicator tracks vehicle sales, business confidence, money supply and other factors to gauge the economic outlook for Africa's largest economy.
Meanwhile, the dollar index showed little change against a basket of currencies but remained at risk of further declines as investors evaluated Washington's expanded sanctions on Iran. U.S. Treasury Secretary Scott Bessent on Monday announced an expansion of sanctions against Iran and warned countries to reduce business ties with Iran or face potential exclusion from the dollar-based financial system.
Source: Investing.com
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