South African rand firmer, eyes on U.S.-Iran tensions

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South African bank notes featuring images of former South African President Nelson Mandela (R) are displayed next to the American dollar notes in this photo illustration in Johannesburg August 13 2014. REUTERS/Siphiwe Sibeko

JOHANNESBURG (Reuters) – South Africa’s rand firmed in early trade on Tuesday as emerging markets drew relief from the absence of any immediate escalation in tensions other than sabre-rattling between Iran and the United States.[EMRG/FRX]

By 0600 GMT, the rand traded at 14.1900 per dollar, 0.15% stronger than its previous close.

In the absence of local catalysts, the rand was set to look to global events for direction.

Fears of a fresh conflict in the oil-rich Middle East have kept markets on the edge following the killing of Tehran’s top general in a U.S. drone strike last week.

In fixed income, the yield on the benchmark government bond due in 2026 was down 2.5 basis points to 8.225% in early trade.

Reporting by Olivia Kumwenda-Mtambo; editing by Uttaresh.V

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