South African rand slips as risk sentiment sours

Source: Market Screener

JOHANNESBURG (Reuters) - South Africa's rand weakened against the dollar early on Wednesday, pulled down by souring risk sentiment.

At 0726 GMT, the rand traded at 18.58 per dollar, 0.38% softer than its previous close.

The dollar index was last trading up 0.14% against a basket of currencies.

"Risk sentiment has fallen a touch as geopolitical tensions in the Middle East are on the rise again," said Andre Cilliers, currency strategist at TreasuryONE.

Israeli forces on Tuesday seized the main border crossing between Gaza and Egypt in Rafah, the southern Gaza city where more than one million displaced Palestinians have sought shelter during Israel's seven-month-old offensive.

Like most emerging market currencies, the rand is risk-sensitive and takes cues from global drivers such as the direction of dollar in addition to local economic data points.

Central bank data earlier showed South Africa's net foreign reserves rose to $57.851 billion at the end of April, from $57.513 billion in March.

On the stock market, the Top-40 and the broader all-share indices were both around 0.3% weaker in early trade.

South Africa's benchmark 2030 government bond was marginally weaker, with the yield up 1 basis point to 10.485%.

(Reporting by Bhargav Acharya; editing by Christina Fincher)