South African rand flat as markets monitor Middle East conflict, await US rate decision
JOHANNESBURG, March 17 (Reuters) - The South African rand was flat on Tuesday as market participants monitored the intensifying conflict in the Middle East and awaited the U.S. Federal Reserve's upcoming policy decision.
At 1420 GMT the rand traded at 16.66 against the dollar ZAR=D3, little moved from its previous close.
Israel's Defence Minister Israel Katz said on Tuesday the Israeli military had killed Iran's security chief, while Tehran kept up attacks against Gulf neighbours.
International oil prices rose more than 2% for the day.
Analysts expect continued pressure on the rand after it shed over 2% last week, extending losses of almost 4% the week before, amid concerns that rising oil prices will lift inflation in net energy‑importer South Africa.
The dollar =USD was down 0.2% against a basket of currencies as investors looked to the Federal Reserve's two-day policy meeting that begins later on Tuesday.
The Fed is widely expected to hold rates for a second straight meeting when it announces its policy decision on Wednesday.
Like other risk-sensitive currencies, the rand often takes cues from global drivers like U.S. policy, in addition to domestic economic data.
Domestically-focussed investors will also be on the lookout for February inflation data ZACPIY=ECI and January retail sales numbers ZARET=ECI on Wednesday.
On the Johannesburg Stock Exchange, the Top-40 index .JTOPI was last up 0.6%.
South Africa's benchmark 2035 government bond ZAR2035= was also stronger, with the yield falling 11.5 basis points to 8.815%.
