JOHANNESBURG, Jan 13 (Reuters) – The South African rand softened in early trade on Tuesday as investors took profits after the currency benefited in the previous session from a surge in gold prices.
At 0815 GMT the rand traded at 16.4250 against the dollar , about 0.2% weaker than its previous close.
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It gained around 0.5% on Monday, boosted by gold which climbed more than 2% to an all-time high as investors sought the safe haven asset after the Trump administration opened a criminal investigation into Federal Reserve Chair Jerome Powell.
Bullion also edged lower on Tuesday as some traders booked short-term profit.
Like other risk-sensitive currencies, the rand is expected to take cues from global drivers like the unrest in Iran in addition to concerns over the Fed’s independence.
On the domestic front, traders are also tracking developments around a potential extension of the U.S. trade preference programme, the African Growth and Opportunity Act (AGOA).
The U.S. House of Representatives approved a three-year extension, but uncertainty remains over whether South Africa will be excluded, given strained diplomatic relations between Washington and Pretoria.
The bill will next go to the U.S. Senate.
On the Johannesburg Stock Exchange, the Top-40 index (.JTOPI), opens new tab was last up 0.2%.
South Africa’s benchmark 2035 government bond was flat in early deals, with the yield at 8.305%.
Reporting by Sfundo Parakozov; Editing by Susan Fenton
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