South African rand softer, markets focus on Trump steel tariff impact

JOHANNESBURG, Feb 11 (Reuters) - South Africa's rand weakened early on Tuesday as traders gauged the effects of U.S. President Donald Trump's tariffs on steel and aluminium imports, which risk sparking a multi-front trade war.

At 0727 GMT, the rand traded at 18.4725 against the U.S. dollar ZAR=D3, about 0.1% softer than its previous close.

Trump imposed tariffs on steel and aluminium imports on Monday to a flat 25% "without exceptions or exemptions" aiming to benefit production in the world's biggest economy.

ETM Analytics said in a research note that South Africa "will be minimally affected".

"For now, the USD-ZAR will trade cautiously and without clear direction, until Trump's policies are understood and the implications are more quantifiable than they are now," the note added.

South Africa-focussed investors will look to December manufacturing ZAMAN=ECI data due around 1100 GMT, for signs on the health of Africa's most industrialised economy. Economists polled by Reuters expect manufacturing output to fall 1.7%.

South Africa's benchmark 2030 government bond ZAR2030= was weaker in early deals, with the yield up 1 basis point to 9.11%.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index .JTPOI last traded about 0.4% weaker. Shares in steel producer ArcelorMittal South Africa ACLJ.J traded 2% weaker on the news of Trump's tariffs.