JOHANNESBURG: The South African rand softened in early trade on Monday, and with few major domestic data points this week, the local currency will likely be driven by global events, analysts said.

At 0713 GMT, the rand traded at 17.4375 against the dollar, about 0.3% weaker than its previous close.

The dollar eased about 0.02% against a basket of other major currencies.

“After what was shaping up to be a torrid week for the ZAR, last week closed out fairly close to where it started, which was not something many anticipated, given that the appreciation of the trade-weighted USD did not give up any ground,” said ETM Analytics in a research note.

This week, local investors could look to South Africa’s business confidence index on Tuesday and August retail sales figures on Wednesday for signs on the health of Africa’s most industrialised economy.

“In the interim, SA will be subject to more offshore developments to drive broader currency direction this week… None of the local data is likely to be particularly market-moving,” ETM Analytics’s note added.

Like other risk-sensitive currencies, the rand tends to take cues from global drivers in the absence of major local factors.

The European Central Bank will make its latest interest rate decision this week and markets will also be watching developments in Federal Reserve’s rate cutting path and Chinese asset volatility.

South African rand gains, focus on Middle East tension and US payrolls data

On the Johannesburg Stock Exchange, the blue-chip Top-40 index was little changed in early trade.

South Africa’s benchmark 2030 government bond was slightly stronger in early deals, with the yield down 1 basis point to 9.145%.