JOHANNESBURG: The South African rand wavered on Thursday against a buoyant dollar, as tensions simmered in the Middle East following Iran’s ballistic missile attack on Israel.

At 0830 GMT, the rand was trading at 17.34 against the dollar, about 0.1% firmer than its previous close, after trading slightly weaker in earlier trade.

“The USD saw strength due to Middle East tensions and strong US labour data, placing pressure on the ZAR,” said Andre Cilliers, currency strategist at TreasuryONE.

The dollar strengthened after robust US jobs data on Wednesday reinforced bets that the Federal Reserve will not rush to cut interest rates in the world’s biggest economy.

The greenback saw additional demand after an Iranian missile attack on Israel on Tuesday boosted safe-haven assets.

Like other risk-sensitive currencies, the rand often takes direction from global drivers in the absence of major local factors.

South African rand softens, global markets focus on Middle East tensions

“While the ZAR has been the best-performing emerging market currency, a correction was overdue after significant appreciation,” Cilliers said.

The rand has gained about 6% over the last three months. On the Johannesburg Stock Exchange, the blue-chip Top-40 index last traded about 1.2% weaker.

South Africa’s benchmark 2030 government bond was slightly firmer, with the yield down 2.5 basis points at 9.035%.