South African rand steady as traders eye Middle East tensions

USDZAR +0.13% DXY −0.04% The South African rand was steady in early trade on Wednesday as traders cautiously assessed geopolitical developments after Iran accused the United States of violating a fragile ceasefire by launching attacks near the Strait of Hormuz. At 0600 GMT, the rand traded at 16.3650 against the dollar USDZAR , little changed from its previous close of 16.3750. The greenback DXY last traded flat against a basket of currencies. "We are stuck in a narrow range until we get some more interesting data from the U.S. tomorrow and our own (South African Reserve Bank) makes a decision on rates. Even then, I don't see much of a move. As usual, everything centres on the Gulf," Adam Phillips, treasury specialist at Umkhulu Treasury, wrote in a ‌note. On Thursday, domestic investor attention will mainly be pinned on the South African Reserve Bank's interest rate decision, when economists polled by Reuters expect the bank to hike the rate (ZAREPO=ECI) by 25 basis points to 7% from 6.75%. South Africa's benchmark 2035 government bond (ZAR2035=) was also flat in early deals, with the yield at 8.54%.