South African rand range-bound as Middle East conflict weighs on risk sentiment

JOHANNESBURG, March 27 (Reuters) - South Africa's risk-sensitive rand traded in a narrow range on Friday as investors followed Middle East developments after U.S. President Donald Trump's decision to postpone attacks on Iran's energy infrastructure.

• At 0801 GMT, the rand traded at 17.11 against the dollar ZAR=D3, little changed on the week and broadly in line with its emerging-market peers.

• ETM Analytics said the currency is expected to remain on the defensive as the U.S.-Israeli war on Iran weighs on risk sentiment.

• Trump said on Thursday he would postpone attacks on Iran's energy plants for 10 days at Tehran's request and that talks with Tehran were going "very well".

• However, reports that the U.S. president was considering sending more troops added to concern about the war escalating into a ground conflict, with no certainty that the Strait of Hormuz could be reopened to shipping soon.

• "The South African Reserve Bank will have a lot to consider in the coming months and will need to constantly walk a fine line between containing inflation expectations and not disrupting the country's Gross Domestic Product growth dynamic," said ETM Analytics.

• The central bank kept its policy rate at 6.75% on Thursday, saying caution was needed.

• On the Johannesburg Stock Exchange, the Top-40 index .JTOPI was down 0.7% in early trade.

• South Africa's benchmark 2035 government bond ZAR2035= also weakened, with the yield rising 13 basis points to 9.12%.