South African rand weakens as firm dollar offsets upbeat business cycle indicator
JOHANNESBURG, March 24 (Reuters) - The South African rand weakened on Tuesday as a firm U.S. dollar outweighed data showing an expansion in economic activity signalled by the central bank's leading business cycle indicator.
At 1309 GMT, the rand traded at 17.1125 to the dollar ZAR=D3, down about 1.8%.
The currency had trimmed some recent losses on Monday after U.S. President Donald Trump stepped back from plans to target Iran's energy infrastructure, lifting appetite for risk-sensitive currencies like the rand.
But sentiment turned cautious again after Iran denied holding negotiations with Washington, reviving fears of an energy‑driven economic shock.
South Africa's composite leading business cycle indicator ZALEAD=ECI rose 0.4% month-on-month in January, central bank data showed on Tuesday.
The index tracks vehicle sales, business confidence, money supply and other data.
"While Q1.26 is expected to see some growth momentum, Q2.26 looks to begin with hefty fuel price increases which will have a depressing effect on retail, wholesale and vehicle sales if the war persists," said Annabel Bishop, chief economist at Investec.
Investors now turn to Thursday's central bank rate decision, when economists polled by Reuters expect the bank to keep its main lending rate ZAREPO=ECI steady at 6.75%.
The U.S. dollar =USD was last up 0.2% against a basket of currencies, with oil prices rising due to supply fears.
Johannesburg's Top-40 index .JTOPI was last down 0.3%.
The benchmark 2035 government bond ZAR2035= weakened, with the yield up 12.5 basis points to 9.01%.
